Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — SCOTLAND

The Secretary of State was asked—

Housing

Mrs. Rosemary McKenna: What steps are being taken to deal with the problems faced by owner-occupiers in housing regeneration and improvement schemes. [65825]

The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald): At present, local authorities can give grants to owner-occupiers to assist with the cost of repairs. The forthcoming Green Paper on housing will consider the housing needs of all tenures, including owner-occupiers. It will be the first Green Paper on housing in 20 years, and is proof of the Government's commitment to achieving better housing in Scotland. From 1 July, it will be a matter for the Scottish Parliament.

Mrs. McKenna: Will my hon. Friend the Minister join me in congratulating North Lanarkshire councils housing department, which this morning received a charter mark award in the presence of the Prime Minister? The Minister will be aware of the specific problems in Scotland's new towns, where a large percentage of owner-occupiers are in former public sector housing. Those houses were built in the 1960s and have particular problems.
Housing partnerships are the way forward in dealing with those complex issues. Cumbernauld housing partnership in my constituency is working hard to find solutions. There is one issue that I should like the Minister to look at. Will those owner-occupiers who do not maintain their properties, and therefore jeopardise their neighbours' plans to take part in the modernisation programme, be dealt with in the White Paper?

Mr. Macdonald: I am happy to congratulate North Lanarkshire council. I visited it at the charter mark award ceremony. It has done extremely well.
As my hon. Friend has pointed out, there is a problem. Local authorities have a wide range of statutory powers available to them. The powers may require some amendment. The question will be raised in the Green Paper.

Mr. Donald Gorrie: Will the Minister follow that up by clarifying what the

Government will do to help owner-occupiers in tenement areas in Scottish cities, where the main problems are that there is a lack of funding for collective repairs—the amount of money available in Edinburgh and Glasgow is about a quarter of what it was a few years ago—and compelling owner-occupiers who do not co-operate in general repairs to do so? There is a need for a legal change to provide some more money. Will the Minister clarify what he is doing about that?

Mr. Macdonald: The latter question, as I have said, will be examined in the context of the Green Paper. There is a problem. Since the dropping of ring-fencing by the previous Government, the amount of money going to owner-occupiers has fallen dramatically. That is something that we will also look at in the context of the Green Paper.

Mr. John Swinney: Does the Minister recognise that one of the problems affecting owner-occupiers is the higher mortgage payments by owner-occupiers in the eurozone? Is he aware that the average owner-occupier in Scotland will pay £1,400 more in mortgage repayments because Britain is outwith the single European currency? What is he going to do about it?

Mr. Macdonald: The Government have already introduced various measures to try to help with mortgages. We have talked to lenders to encourage them to provide flexible mortgages and mortgage insurance. That has been welcomed by those holding mortgages.

Nurses

Mr. Tony Worthington: If he will make a statement about the supply of nurses in Scotland. [65826]

The Parliamentary Under-Secretary of State for Scotland (Mr. Sam Galbraith): The supply of and demand for nurses and midwives in Scotland is assessed annually, taking account of employers expectations over a five-year horizon. This year, the intake to nurse training courses will be increased in accordance with the findings of last years assessment. A new assessment for 1999 is about to be launched.
Currently, the vacancy rate is around 3 per cent., part of which is turnover. At present, there are 1.7 suitably qualified applicants for every place available for nursing or midwifery training courses. From 1 July 1999, that will be a matter for the Scottish Parliament.

Mr. Worthington: Can my hon. Friend confirm that it is a good time to go into nursing because the role of nurses is being redefined, particularly in primary care groups? Their role will be one of leadership rather than of following, and they will have a much broader and more enhanced role.
Will my hon. Friend encourage health boards to place less reliance on agency nurses in their staffing of hospitals, because the quality of the service is bound to fall if staffing is too tight and agency nurses are used too often?

Mr. Galbraith: Although the use of agency nurses is low in Scotland, it is being reviewed with the option of


reducing it even further. My hon. Friend is correct: it is a good time to go into nursing. The nursing profession is enhancing its role and developing new tasks: nurse practitioners, nurse consultants, triaging and handling casualty. They play a vast leadership role, not just in the hospital sector, but in primary care groups, primary care trusts and other sectors. They have a vast horizon ahead of them. I welcome all the nurses and hope that the package that we are putting together in discussion with them will lead to an even greater number of nurses applying for the places available.

Mr. Oliver Letwin: What is the total cost of the Minister's bureaucratic reorganisation of the health service in Scotland? How many extra nurses could he employ by saving that money?

Mr. Galbraith: The reorganisation involves no costs. The savings produced by reducing the number of trusts by almost half are £18 million and the total savings from slashing the bureaucracy imposed by the previous Government are £100 million.

Mr. John McAllion: We are told that under capitalism supply will always increase to meet demand, but as the national health service is a socialist enterprise, does my hon. Friend agree that the only sure way of increasing the supply of nurses is to pay them the full rate for the job? We had 18 years of Tory government boosting the pay of the police and the armed forces. Can we have the next 18 years of socialist government boosting the pay of nurses, doctors, social workers, teachers and public sector workers that make up the fabric of our still too neglected welfare state?

Mr. Galbraith: My hon. Friend is right. One of the great assets of the NHS is that it is a system based on need and free at the point of delivery. Its staff are part of the reason that it delivers so well and that is why the Government seek to ensure that their contribution is recognised and rewarded. We trust that the review body's recommendations will recognise the value of nurses and others in a way that the Government can afford.

War Memorials

Mr. Robert Maclennan: If he will make a statement on the Governments policy towards the maintenance, repair and protection of Scottish war memorials. [65827]

The Minister for Home Affairs and Devolution, Scottish Office (Mr. Henry McLeish): Responsibility for the maintenance, repair and protection of a war memorial lies with the owner, or the body in which it is vested. Local authorities are responsible for the war memorials that they own. I expect them to take that duty seriously and I shall take steps to draw the matter to their attention.

Mr. Maclennan: I thank the Minister for that reply. Is he aware that the sacrifice made by the young is still strongly felt in the highland communities and the long list of the dead is still a reminder in the heart of every parish? Will he remind the Highland regional council that it is entrusted with the safekeeping of our memorials and that

it is inappropriate for it to have made no budgetary provisions for their upkeep? Furthermore, will he give an assurance that the modest sums at stake are not used as a pawn in arguments between central and local government about spending requirements?

Mr. McLeish: I concur with those comments. It is a serious matter. Let me take the opportunity to acknowledge that war memorials are important to every family and community in Scotland and to the country at large. Given that we are 80 years on from the end of the 1914–18 war, it is absolutely right that we should acknowledge that. Let me reassure the right hon. Gentleman that I take the matter seriously. I shall take it up with the Convention of Scottish Local Authorities and with the Highland regional council. It is not an issue that requires large expense in many communities, but there is a facility that provides the powers to the local authorities that own war memorials. However, the collective view of the House should be that war memorials should be taken seriously and I shall pursue the matter. After 1 July 1999, it will be a matter for the Scottish Parliament.
I hope that the Scottish Parliament will want to look again at the relevant legislation as we cannot sacrifice the war memorials that fulfil an important function in society.

Mr. John Home Robertson: Will my hon. Friend pay special attention to the commemoration of Scots who died while serving with units based in other parts of the United Kingdom, and English, Welsh and Irish service men who died on active service with Scottish units during two world wars? Will he comment briefly on the extraordinary statement of Colonel Stuart Crawford, the SNP defence spokesperson, who said that the Scots guards who are commemorated on so many Scottish war memorials are
a quasi-mercenary regiment … tainted by their association with England?

Mr. McLeish: However tempted I may be, I do not want to go too far down that road. Suffice it to say that the SNP defence policy is a shambles and we should not spoil the discussion of an important issue with such comments. People who lose their lives in war, no matter what their nationality, should be commemorated. We have proud traditions in Scotland, Northern Ireland, Wales and England regarding that. It is the collective wish of the House that we register that concern today and send a message to every council and every owner of a war memorial that they should ensure that they are kept in a proper state of repair. Communities demand that and the House should reflect that concern.

Rev. Martin Smyth: The Minister will recall that although the Ministry of Defence could not pardon those soldiers who were killed—wrongly, in the opinion of many—because they seemed to have deserted their posts in the first world war, there was a suggestion that their names could be put on war memorials. Has that been followed up in Scotland?

Mr. McLeish: The hon. Gentleman raises an important point. However, my colleagues at the Ministry of Defence, including my right hon. Friend the Secretary of State, will want to look at his comments in the Official Report and respond to him.

Dr. Liam Fox: I am sure that the Minister—unlike the Scottish National party—would


agree that the best way to commemorate those who died in the service of their country, and those who believe in the United Kingdom, is to maintain Scotland's role in the national defence of the whole UK. In view of that, can the Minister tell us what case Scottish Office Ministers have put to the Ministry of Defence that the Royal Ordnance factory at Bishopton should be kept open?

Madam Speaker: Order. The hon. Gentleman's question is totally out of order. It does not relate to Scottish war memorials. I understand that the hon. Gentleman wants to ask another question.

Dr. Fox: indicated dissent.

Madam Speaker: In that case, we shall move on.

Hospital Expenditure

Dr. Gavin Strang: If he will make a statement on the planned levels of expenditure on hospital services over the next three years. [65828]

The Secretary of State for Scotland (Mr. Donald Dewar): We plan to increase net revenue expenditure on hospital and community health services to almost £4 billion a year by 2001–02. That is part of an overall health service expenditure figure of £5.5 billion. We are investing to create a world-class NHS and putting in place the reforms and resources to make that happen.
Of course, from 1 July 1999, this will be a matter for the Scottish Parliament.

Dr. Strang: I welcome the hundreds of millions of pounds of additional money that Labour is putting into our hospital service. Does my right hon. Friend agree that it takes more than bricks and mortar to make a good hospital? As we await the outcome of the nurses pay review, does he recognise that it is high time that nurses and other hospital staff obtained the recognition that they deserve for the excellent work that they do?

Mr. Dewar: My hon. Friend will recognise that a pay review body report is pending, and we will know shortly the specific recommendations that the body has made as a result of what I hope has been a careful and sympathetic examination of the situation. Obviously, we will then make an announcement as a Government. I agree about the fundamental importance of staff morale, and about the enormous contribution that not just nurses, but paramedics, the professions allied to medicine, doctors and a range of health service personnel make towards a service that we are determined to keep in first-class order—providing a service on the basis of need, irrespective of the patients income. We are fortunate in Scotland that, in the year 1999–2000, we anticipate spending about £961 per head for every person in Scotland, which is 20 per cent. above the average for the rest of the country.

Mr. Michael Moore: Will the Secretary of State consider putting some of those resources into the casualty units in Scotland? Is he aware of the survey by the Scottish

Association of Health Councils—carried out in casualty units across Scotland yesterday—which came out with alarming statistics showing the length of time that people are having to wait in casualty units, including an 88-year-old patient at the Western infirmary in Glasgow, who waited on a trolley for four hours and ten minutes with a broken leg? Will the right hon. Gentleman consider putting more resources into collecting proper information on casualty units and other difficult issues such as bed blocking, because it looks increasingly that when the Government are embarrassed about an issue, they stop collecting the relevant information?

Mr. Dewar: I assure the hon. Gentleman that we collect the information, which is published periodically. I am sorry that he asked the question in the way that he did. I accept entirely his point about the particular patient and the incident covered in the press release from the Scottish Association of Health Councils. In fairness, the hon. Gentleman should have recorded the fact that although the association pointed to local pressures, it came to this conclusion:
Our survey clearly shows that there are significant problems in some parts of the country but there is no crisis.
It would have been fairer, and a little better for the hon. Gentleman's reputation, if he had made that clear.

Mr. Tom Clarke: Will my right hon. Friend join me in congratulating Greater Glasgow health board and East Dumbartonshire council on the funding and joint planning arrangement that they have agreed for Lenzie hospital? Given that hospitals service to elderly people, the expansion that is envisaged and the provision of facilities for my constituents and those of my hon. Friends the Members for Strathkelvin and Bearsden (Mr. Galbraith) and for Cumbernauld and Kilsyth (Mrs. McKenna), does he agree that community care can be seen to work if there is a positive attitude, with proper funding and the political will to achieve it?

Mr. Dewar: I agree wholeheartedly. I know that my right hon. Friend, as a local Member of Parliament, has been very much involved in the process whereby the health service, local government and the community have worked together to accommodate change that is right but that, had it not been handled co-operatively, might have led to difficulties, frustrations and problems for individual patients and their families. That co-operative spirit is very important, as is the fact that, if the present plans are carried through—and they certainly will be if Labour Members have anything to do with it—the reforms and modernisation that are required in the health service will take place, against the background of substantial real-terms increases in expenditure, which will mean an enormous amount to patients and health service staff.

Mr. Alex Salmond: Will the Secretary of State confirm that Consort Healthcare, the private finance initiative consortium, paid £12 million for the three sites of Edinburgh Royal infirmary, but that the surveyors, D. M. Hall, have estimated the value at £70 million without planning permission or up to £200 million with it? Does he agree that, if those sums were realised, it would be a major scandal? If £70 million


were to be realised for the sites, what percentage would be returned to the health trust, in the form of any overage agreement?

Mr. Dewar: The hon. Gentleman's enthusiasm is running away with him. I assure him that his facts are simply wrong. On the various sites that were part of the package—very sensibly, because they are surplus to requirement and it makes sense to realise their full market value as part of the cost of building the Royal Edinburgh infirmary—there were two valuations, by the district valuer and by Ryden International. In both cases, the price paid was fully in line with the market value of the estimates. The figure mentioned by the hon. Gentleman is totally a figment of his imagination or that of those who—

Mr. Salmond: It is in the newspapers.

Mr. Dewar: Before he quotes newspaper reports, the hon. Gentleman should go to the health board, for example, to discuss the situation and find out the facts. Then he would not be in a position to spread irresponsible scare stories, as he has done. As he would know if he had consulted the contract, if there are unexpected planning gains for those who have taken over the sites, the profits will be capped and there will be a claw back.

Mr. Ernie Ross: My right hon. Friend and his ministerial team are very welcome to come back to Dundee, especially if they make announcements such as the one that was made at the start of the month, which will ensure that the purpose-built palliative care unit at Roxburgh house in Dundee can be replaced at the same time as the day-care centre for cancer patients, giving Dundee and Tayside a modern hospice centre for those who require it.

Mr. Dewar: I am grateful to my hon. Friend and I agree with him entirely. Clearly, in a city such as Dundee, as in every part of Scotland—rural areas are as important as cities—we will do all we can to maintain and, more importantly, improve services and centre them on patients needs. I welcome, for example, the fact that we have a new accident and emergency centre at Ninewells, which will give very good service to Dundee and its people.

Dr. Liam Fox: Dr. Brian Potter, the secretary of the British Medical Association in Scotland, has said that NHS management in Scotland is in an unbelievably awful state. Dr. Keith Little, the head of accident and emergency at Edinburgh Royal infirmary, has resigned because he said that his job was impossible. Dr. Rudy Crawford at Glasgow Royal infirmary says that conditions are the worst in living memory. That is the real world of the NHS in Scotland. Does the Secretary of State accept any responsibility for the current situation, or does he intend simply to maintain that everything is all right?

Mr. Dewar: No, I am not going to maintain that everything is all right. We inherited considerable difficulties and we are setting about improving them. It will take time. As I tried to say in what I hope was a balanced approach to the audit carried out on accident and emergency centres by the Scottish Association of Health Councils, which was press released today, I certainly

acknowledge that there are local pressures—there always have been. The idea that people have to wait for treatment longer on occasion than we would like at the height of the winter pressure is something that has happened in the past year and never occurred during the 18 years in which the Conservative party was in charge does not stand even a moments examination. We are now dealing with needs and the SAHC has pointed out that the use of the word crisis is not justified. We must continue to deal with the difficulties.
We have initiated the biggest building programme ever for the national health service in Scotland and we are providing resources on a climbing scale, the like of which the NHS has not seen before. I also hope that in the near future, as a result of the findings of the pay review body, we will be able to do something to help on that side as well. The hon. Gentleman's overstatement, which is a natural ability—almost a compulsive addiction—of his, does nothing to support his case.

Housing

Mr. Michael Connarty: If he will make a statement on the development of new housing partnerships in Scotland. [65829]

The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald): In the next three years, £278 million is being made available to develop and support new housing partnerships. The bids are being assessed by an advisory group that includes representatives from the Convention of Scottish Local Authorities, Scottish Homes, the Chartered Institute of Housing and the Scottish Federation of Housing Associations Ltd. From 1 July 1999, that will be a matter for the Scottish Parliament.

Mr. Connarty: I commend my hon. Friend for the enthusiastic and imaginative way in which he has approached new partnerships in housing. I recognise that the community housing trusts will offer financial benefits to councils with high capital debts outstanding. However, will my hon. Friend ensure that councils which do not want to go down the community housing trust road because they do not have high capital debts outstanding on their housing, will not be penalised in any way because they lack the capital that they need to deal with their housing problems?
In a spirit of partnership, will my hon. Friend ensure that ballots for community housing trusts are not rigged, as Scottish Homes ballots were, and that the housing is transferred only when a majority of those balloted vote for such a transfer?

Mr. Macdonald: I can certainly give my hon. Friend the guarantees that he seeks about ballots and tenants rights. As part of the transfer to community ownership, it is important for tenants to arrange guarantees, for example, on future rent increases and other aspects of the tenancy that they might want to retain. It is important to realise that no transfer is likely to take place in any council for two or three years. Therefore, tenants will have a long time to study any proposals. There is no question of penalising local authorities that do not want to participate.

Mr. Andrew Welsh: Instead of the Minister giving more than £1 million to Glasgow city council for


a feasibility study on the part-privatisation of its council housing stock, would it not be better to spend that money on building, maintaining and improving Glasgow council houses? When will we get more than £1 million for council house modernisation and improvement, rather than for one feasibility study?

Mr. Macdonald: Glasgow is pursuing a project which, if it succeeds, will directly empower tenants, contribute to community regeneration and bring additional money into housing to improve it. Every time the hon. Gentleman and the Scottish National party use language such as privatisation or profiteering, they alienate not merely tenants who are thinking about going ahead with such projects, but the many who are already involved in housing associations and tenants co-operatives, who are certainly not privatised or profiteering in the way that he describes. He should also check on SNP party policy on the subject. This weekend, when reading Inside Housing, I noted that the party's housing spokeswoman, Fiona Hyslop, said that, for the SNP,
stock transfer is not ruled out.
There appears to be quite a lot of confusion on SNP policy. The hon. Gentleman would do best to try to sort that out.

Mr. David Marshall: Unlike the hon. Member for Angus (Mr. Welsh), I want housing standards in Glasgow to improve. I am grateful to the Minister for having taken the trouble to visit substandard and poor housing in my constituency last year. Does he agree that one legacy of the Tory Government was the large amount of BTS—below tolerable standard—housing, mainly that owned or factored by private landlords? That is unacceptable. Will he consider extending housing partnerships to include BTS housing in areas such as Govan Hill and other parts of my constituency, and to any part of Scotland where such poor quality housing still exists?

Mr. Macdonald: Local authorities are working hard to tackle the level of BTS housing. We will always assist them with such projects. On new housing partnerships, we are primarily targeting the tenanted sector, because much deterioration and neglect occurred there under the previous Government over 18 years.

Sir Robert Smith: Will the Minister review the regulations that apply to partnerships? Will he ensure that, in his desire to put tenants first and let them have first say, where they are happy to maintain the local authority as landlord, there will be no distortions in funding or any temptation to go against the wishes of the tenants?

Mr. Macdonald: I repeat that no community transfer is likely until after two or three years of study of the proposals, not only by local authorities but by tenants. They can look hard at the package offered. Only at the end of that process will they be invited to vote on it. That provides a secure guarantee for tenants.

Health Care Co-operatives

Mr. Malcolm Chisholm: When he will issue guidelines for local health care co-operatives. [65831]

The Parliamentary Under-Secretary of State for Scotland (Mr. Sam Galbraith): I intend to issue broad guidance for local health care co-operatives this month. From 1 July 1999, this will be a matter for the Scottish Parliament.

Mr. Chisholm: I welcome the fact that the Minister has changed his mind in the week since I raised the matter in the Scottish Grand Committee. Will he ensure that social work will be fully involved in local health care co-operatives, that nursing advice and representation will be guaranteed, and that there will be a significant role for members of the wider public? Will the co-operatives be dealt with in the forthcoming health Bill? When does he expect the Bill to be published? Is he sure that this last ever United Kingdom health Bill will pass through this House before health matters pass to the Scottish Parliament?

Mr. Galbraith: The purpose of local health care co-operatives is to ensure that everyone involved in the delivery of care across the spectrum is involved. That is the intention, and that is what they will deliver. There is no need to have them in the health Bill because they are not statutory bodies.

Mr. Desmond Swayne: Can the Minister confirm that the cost of setting up the new primary care trusts is broadly equivalent to the cost of supplying 150 full-time, fully qualified nurses?

Mr. Galbraith: I think that the hon. Gentleman has heard earlier questions from his Front-Bench colleagues and is trying to get some drift on bureaucratic costs. I repeat that reducing the number of trusts in Scotland has saved us £18 million; over the life of the Government, reducing bureaucracy set up by his Government will save the people of Scotland £100 million, all of which can be directly put into nurses, doctors and patient care.

Domestic Violence

Ms Sandra Osborne: If he will make a statement about the actions the Government are taking to protect the victims of domestic violence and abuse. [65832]

The Minister for Education, Scottish Office (Mrs. Helen Liddell): The campaign against domestic violence is a priority for the Government. We have established a Scottish partnership on domestic violence to report with a detailed work plan and timetable by 31 March this year. We have also embarked on a consultation exercise on preventing violence against women; a proposed action plan is intended as part of that consultation. At Christmas, a new advertising campaign was launched, aimed at raising awareness and changing attitudes. It will roll out over the next three years. From 1 July 1999, this will be a matter for the Scottish Parliament.

Ms Osborne: I welcome the priority that the Government give to domestic violence. Will the Minister join me in condemning the actions of the former divisional commander of Kilmarnock police, who ordered the release of a man who had been charged with assaulting his wife, because that man was a family friend? Does she


agree that that undermines the very positive policy of Strathclyde police, whereby it is presumed that alleged perpetrators of domestic violence will be detained until their court appearances? Does she agree that while changing public attitudes is the long-term solution, Scotland has only half the refuge spaces needed? What will she do to address the shortage?

Mrs. Liddell: I share my hon. Friends concern about the incident that was reported in the newspapers over Christmas. I know that the chief constable of Strathclyde has dealt with that matter. May I draw to my hon. Friends attention the way in which the media covered that case? It was done in a sensible and responsible manner and the media concentrated their attention on the negative impact of domestic violence on the well-being of families in Scotland. I pay tribute to the media organisations in Scotland that have signed up to the campaign against domestic violence. It will take time to change attitudes, but it will be helpful to have the support of the community and of the media not only in news columns, but throughout.
As for the resources required to deal with domestic violence, our prime concern must be for the plight of the victims of such violence. So far, the Scottish Office has provided £200,000 to Scottish Womens Aid, the umbrella organisation for local womens groups. That includes more than £83,000 for work on developing refuge and permanent rehousing options for abused women who would otherwise be homeless. More than £111,000 has been devoted to social welfare aspects of the work of Scottish Womens Aid, and £25,000 has been provided for training. Over and above that, considerable expenditure has been incurred by the police, the justice system, the health service and others who deal with the consequences of domestic violence.

Mr. Archy Kirkwood: I acknowledge and welcome the announcement that the Minister has made about the work that is being done. Does she acknowledge that when I did divorce work as a solicitor, I found that the best way of preventing domestic violence was often to have a refuge place available to which the family could be taken in an emergency? The hon. Member for Ayr (Ms Osborne) is right that the provision of such refuges is still inadequate. Can the Minister give the House a commitment to do all in her power not merely to make available £73,000, but to work with the Convention of Scottish Local Authorities and the voluntary sector to establish proper provision of refuges throughout Scotland?

Mrs. Liddell: I share the hon. Gentleman's concern on these matters. I have pointed out that £200,000 has been given to Scottish Womens Aid. Yes, the issue of refuges is serious, but we want to move to a situation in which domestic violence is so abhorrent in our society that we no longer have need of such refuges. Those in the hon. Gentleman's profession who deal with women from differing social classes also acknowledge that there has to be a multiplicity of routes to assistance for families and women who are the victims of domestic abuse.

Dr. Norman A. Godman: I welcome the initiative that my hon. Friend has just mentioned. May I remind her that young victims of

domestic violence and abuse are treated with considerable sympathy when they give evidence in criminal cases involving charges of abuse—sexual, physical or violent. Does she agree that the concept of a vulnerable person should be widened to give other fragile, vulnerable individuals the same protection when they give evidence in court cases? I know that my hon. Friend will say that Members of the Scottish Parliament will decide that matter, but it is an important issue.

Mrs. Liddell: My hon. Friend the Minister for Home Affairs and Devolution is currently looking at that matter. It is an issue that many who are concerned about domestic abuse take very much into account.

Mr. John Bercow: Given the importance of tackling domestic violence and abuse, on which there is unanimity in the House, can the Minister explain to us this afternoon why Victim Support (Scotland) has suffered a decrease in its budget despite an increase of 300 per cent. in requests for its assistance?

Mrs. Liddell: That is simply not true. I will make that point when I visit Victim Support (Scotland) on Thursday morning, accompanying the Princess Royal.

Local Government Finance (Glasgow)

Mr. Ian Davidson: If he will make a statement on the local government financial settlement for Glasgow for 1999–2000. [65833]

The Secretary of State for Scotland (Mr. Donald Dewar): Scottish councils will see the best financial settlement for seven years, with significant funding increases for front-line services, especially education. Glasgow's share of central Government support for 1999–2000 is set to rise in line with the Scottish average by almost 5 per cent.

Mr. Davidson: Will my right hon. Friend clarify whether that will reduce the differential that is paid by Glasgow residents over and above that which is paid by other council tax payers in Scotland? Will he do all he can to ensure that Glasgow's bearing of the metropolitan burden and its difficulties—Glasgow faces the highest rates of poverty and unemployment in Scotland—are adequately recognised in future grant settlements?

Mr. Dewar: I recognise that there are special problems in Glasgow, which is my own city. I also recognise that Glasgow gets a higher grant per head than other local authorities, although there is always an argument about whether the balance is right. The increase in guidelined expenditure in Glasgow will be £47.6 million, or 4.9 per cent., which takes the overall figure to slightly more than £1 billion. Although I am sure he is aware of it in general terms, I remind my hon. Friend that Glasgow is the major beneficiary of the safety net, which is worth about £8 million to the city this year; that the Scottish Office has made arrangements to cover the revenue costs of the transfer by Glasgow from its housing revenue account of capital costs to the general fund relating to demolished houses; and that Glasgow's schools project alone is worth


a capital equivalent of more than £130 million. We are trying to help Glasgow and recognise its problems, and we shall continue to do so.

Mr. Ian Bruce: I am sure that the right hon. Gentleman's constituents will be pleased with that pork barrel list of extra help for Glasgow. Will he comment on the fact that he believes that council taxes will rise by 5 per cent.—twice the rate of inflation—which surely flies in the face of the Labour Government's commitment not to put up taxes? Is he confident that Glasgow will keep to 5 per cent., given that most local authorities that have been told by the Government that they should be charging 5 per cent. extra are pushing up to 8 per cent., 9 per cent. or 10 per cent. extra? Is that to be the reality of Labour government, both national and local, in Glasgow?

Mr. Dewar: The hon. Gentleman is becoming an increasingly ridiculous figure, although, to be fair, he is trespassing into areas about which he knows little. He will remember that, under the settlements provided by the Conservative Government, the annual increase in Glasgow's council tax ran at about 20 per cent. That figure has now been halved and I hope that it will substantially decrease again this year. We are making progress and our aim is to provide the people of Glasgow with the services they deserve, while properly recognising the protection required by council tax payers. If the hon. Gentleman looked at the record, he would blush as deep a colour as his hair once was and say little about the subject and the record of the Conservative Administration.

A83 Closures (Ferry Fares)

Mrs. Ray Michie: Pursuant to his answer of 17 December 1998, Official Report, columns 688–89, on the A83 closure, if he will ensure that fares on the temporarily enhanced ferry service are charged at a rate which reflects road equivalent tariff. [65834]

The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald): Road equivalent tariff is not a system we favour generally, because, as the hon. Lady knows, there are winners and losers, depending on the length of the route. However, I recognise the difficulty she points to and I shall make available extra resources to CalMac to allow fares for heavy goods vehicles to be reduced by up to 50 per cent. at off-peak times and for other traffic by up to 25 per cent.; and there will be smaller reductions at peak times. From 1 July 1999, that will be a matter for the Scottish Parliament.

Mrs. Michie: I am grateful to the Minister for agreeing to restructure fares, but it is not good enough. Even with a 50 per cent. reduction, fares will be far too high for a short, 20-minute, four-mile journey. Does the Minister agree that the Kintyre economy has suffered enough, with the closure of Machrihanish and the Campbeltown shipyard, farmers going to the wall and the effect on tourism? Does he accept that I am asking not for RET for the whole CalMac ferry fleet—not today, anyway—but for arrangements to cover only two or three weekends? That would make an enormous difference to local businesses and I hope that the Minister will reconsider.

Mr. Macdonald: I accept that the hon. Lady wants to get the best for her constituents by securing the maximum

reductions possible, and she is right to do so from a constituency point of view. However, I have to try to balance the available ferry capacity with what is reasonable in terms of public expenditure, and I believe that the reduction is a balanced one, costing £100,000 extra to CalMac.

Land Reform

Mrs. Eleanor Laing: What responses he has received on his consultation on land reform. [65836]

Mr. Tim Boswell: If he will make a statement about the economic impact of his proposals for land reform in Scotland. [65838]

The Secretary of State for Scotland (Mr. Donald Dewar): We received more than 1,200 responses to our consultation papers on land reform. Our proposals are genuinely radical and have been widely welcomed. I am glad that they are attracting the attention of so many Conservative Members.

Mrs. Laing: I agree that the Secretary of States proposals are, if nothing else, radical, but does he not agree that, in practice, those who look after the land in Scotland are farmers? Would it not have been more relevant to events in Scotland if the Secretary of State had made plans to spend taxpayers money helping farmers in their present crisis instead of wasting enormous sums on his radical but old-fashioned policies on land reform?

Mr. Dewar: May I say to the hon. Lady in a friendly spirit that I would welcome her coming back to her homeland, going perhaps a little wider than Kilmacolm, where she was born, and talking to the National Farmers Union of Scotland about the substantial package of aid twice put together in the past year to help, in particular, those in less favoured areas of agriculture, such as beef and sheep? A great deal of money has gone into that.
We are now putting forward a radical proposal that would allow communities who have lived on the land and invested their lifes work in the land to have a say. They would be able to buy the land if it were on the market and would get the advice, support and encouragement that would allow them do that if they so wished. That is not an easy option and people must be in a position to take advantage of that chance—they must have skills, know-how and staying power. Throughout Scotland, there is popular support for our attempts to deal with the land question and give those small communities, who often live in fragile parts of the country, the right to have a say, so that they do not wake up one morning and find that the land on which they live has been sold from under their feet without their knowledge.

Mr. Boswell: Will the Secretary of State heed the danger that the threat of a compulsory purchase order may reduce the collateral available to landowners on which they could raise loans to develop their properties and business? Will he also have regard to the interim report of the working party to the Deputy Prime Minister, which sets out the entirely sensible, fundamental principle that


one precondition of compulsory purchase should be that the public interest clearly outweighs the rights of the individual citizen?

Mr. Dewar: I recognise that there are good landowners and that many struggle, often in difficult circumstances, to maintain their holdings and work them effectively. The hon. Gentleman has obviously given the matter much thought, so I am sure he will recognise that there has been a great deal of support for our proposals, from institutions as well as individuals, some of whom represent large bodies of landowning opinion. I have been very impressed by the constructive way in which many of those organisations have approached the matter.
I do not want to embarrass a noble Lord, but I cannot help reflecting on the words of the Duke of Buccleuch, who said of the reform:
If this had been going through the House of Lords, I would have voted for it.
I should say, in fairness, that he went on to criticise aspects of the reform.

Oral Answers to Questions — LORD CHANCELLORS DEPARTMENT

The Minister of State was asked—

Judges (Declaration of Interests)

Mr. Gordon Prentice: What steps he is taking to ensure that judges declare any relevant interests before hearing a case. [65855]

The Minister of State, Lord Chancellors Department (Mr. Geoffrey Hoon): There already exists a requirement that any individual judge who recognises a potential conflict of interest should inform the parties concerned. In addition, my right hon. and noble Friend the Lord Chancellor wrote to the senior Law Lord on 16 December last year asking that the Law Lords should, before hearing an appeal, consider together whether any of their number might appear to be subject to a conflict of interest and, in order to ensure their impartiality and the appearance of impartiality of the Committee, require any Law Lord to disclose any such circumstances to the parties and not sit if any party objects and the Committee so determines.

Mr. Prentice: That is a very good answer, but does not my hon. Friend share my incredulity that when the Lord Chancellor and the Lord Chief Justice wrote to members of the judiciary asking them voluntarily to disclose whether they were members of the freemasons, 64 members of the judiciary stayed silent? In the light of that statistic, is there not a compelling case for introducing a statutory register of interests, such as that which applies in the House, to make sure that when judges hear cases, they show their hand first?

Mr. Hoon: I am grateful for my hon. Friends compliment—if that is what it was. Clearly, the Government are anxious to learn all the lessons from the

Pinochet case, and will continue to monitor the situation. However, we have no plans at present to introduce a comprehensive register of interests for the judiciary.

Mr. Edward Garnier: The hon. Member for Pendle (Mr. Prentice) could have found the same response in a written answer that appeared today at column 50 of Hansard.
I remind the Minister that the Lord Chancellor, his boss, is the head of the judiciary. Under the Access to Justice Bill [Lords], he has taken on 17 new powers or interests. Will the Minister justify three of them?

Mr. Hoon: The hon. and learned Gentleman knows full well that, once the Access to Justice Bill [Lords] has made its way through the other place, he will have every opportunity to raise such questions on the Floor of this House. I am sure that we can discuss them at the appropriate time.

Mrs. Alice Mahon: Will my hon. Friend say whether coroners are required to complete the masonic disclosure forms? If so, have they all completed the forms? If not all have done so, will he publish a list of those who have not?

Mr. Hoon: I am not aware that they are so required.

Community Legal Advice Services

Fiona Mactaggart: In what ways he monitors the adequacy and quality of community legal advice services; and what further action he plans to ensure excellence in such services. [65856]

The Minister of State, Lord Chancellors Department (Mr. Geoffrey Hoon): The majority of advice services are currently provided outside the existing legal aid scheme. The Legal Aid Board subjects franchised legal and advice service providers to a continuous monitoring process and receives advice from the 13 regional legal services committees on local need for legal services. As part of the developing community legal service, we are establishing a quality task force to develop a kitemark system for high quality community legal services.

Fiona Mactaggart: Does my hon. Friend share my concern that the provision of immigration advice in some parts of the country is still inadequate to meet the needs of the community, and that there are too few franchised lawyers offering immigration advice? What steps are being taken to increase the accessibility of excellent immigration advice where it is needed throughout the country?

Mr. Hoon: I do share my hon. Friends concern. The Government attach great importance to the availability of competent advice on immigration matters. Poor quality advice can be very damaging, both to the client and to the wider community. As a result, the Government have asked the Legal Aid Board to submit detailed proposals to tackle the shortfall of quality advice providers. The extension of


the deadline for solicitors to apply for a legal aid franchise will also give practitioners wishing to apply for an immigration franchise further opportunities to do so.

Mr. Nick Hawkins: First, may I offer my genuine and heartfelt commiserations to the Minister whose boss once again appears to have vetoed his long-delayed and well-deserved prospects of promotion?
On the subject of the need for community legal advice centres, does he accept that the overlap between such centres and citizens advice bureaux causes great difficulty? Will he examine that problem carefully, as citizens advice bureaux staff are often asked for advice on complex legal questions for which they are not qualified? Sometimes CAB staff find it difficult to know where best to send people with legal problems so that they can receive comprehensive advice from qualified persons.

Mr. Hoon: I am grateful for the hon. Gentleman's observations, not least because of the sheer pleasure that trying to answer his questions on a Tuesday afternoon each month always gives me. The Government are aware of the potential difficulties caused by conflicting sources of advice. That is why we have established five pioneer areas under the community legal service scheme, specifically to determine how best we can reconcile the needs for first-tier advice of a more general nature with the provision of the more specialised legal advice that is sometimes required.

Court Service (Exeter)

Mr. Ben Bradshaw: What progress has been made on securing funding for the proposed new accommodation for the court service in Exeter. [65857]

The Minister of State, Lord Chancellors Department (Mr. Geoffrey Hoon): The Government have accepted my hon. Friends representations about Exeter requiring new courtroom accommodation. It will be acquired through a private-public partnership, and we expect bids to be invited by July.

Mr. Bradshaw: I am extremely pleased by that reply and grateful to my hon. Friend. There has been much local concern about delay in the realisation of the scheme, so can my hon. Friend go a little further by publishing a formal timetable for the advertisement and for the start of work? Might he also re-examine the reasons given for the magistrates court decision not to relocate into the new complex, as many people—including me—believe that those reasons are fallacious?

Mr. Hoon: My hon. Friend has argued assiduously, effectively and consistently for a new Crown court in Exeter. Now that the Government have accepted his case, it is important to make progress with all possible speed. However, accommodation for the magistrates court is a matter for the local magistrates court committee.

Legal Services (Public Access)

Ms Sally Keeble: What regional consultations he has undertaken in respect of improved public access to legal services. [65860]

The Minister of State, Lord Chancellors Department (Mr. Geoffrey Hoon): The Government

will take account of a wide range of views in planning and funding legal services through the community legal service. The 13 regional legal services committees established by the Legal Aid Board as part of our programme of legal aid reform include members drawn from all sectors of their local communities. The RLSCs have undertaken regional consultations throughout England and Wales to develop regional strategies for the provision of legal services.

Ms Keeble: Is my hon. Friend aware that consultations in Northamptonshire have revealed considerable concern about access to legal services? Is he further aware of concerns among local mental health organisations, particularly the National Schizophrenia Fellowship and MIND, about the difficulties for people who have mental health problems in pressing their claims under the Disability Discrimination Act 1995? Those people cannot receive legal aid or legal help in going to employment tribunals, and they have great difficulty in representing themselves.

Mr. Hoon: I am grateful to my hon. Friend for that question. The regional legal services committees have already examined, in a general sense, the legal needs of the disabled, and the relevant voluntary groups and representatives have been included in the consultation processes. The Legal Aid Board will also be represented on the quality task force being established by the Lord Chancellor, which will address disability and equality issues.
The flexibility provided by our proposals for a community legal service will allow us to provide, for the first time, specific assistance for the legal needs of the disabled, if those needs are identified as a local priority.

Miss Anne McIntosh: Does the Minister agree that public expectation of access to legal services is rising beyond the level that the budget allocated by the Government can possibly meet? What is he doing to satisfy public expectations?

Mr. Hoon: I agree that demand for legal services is increasing. That is why the Government have set before Parliament a White Paper and a Bill on the need radically to reform the way in which legal advice is given. In particular, we must control the costs of the traditional legal aid system to make more money available, particularly for the most vulnerable in society. I look forward to receiving the hon. Lady's support for the Governments proposals.

Mr. Richard Allan: A key part of the Governments proposals for access to justice will be the provision of insurance against defence costs. What consultation has the Minister had with the insurance industry? Is the industry ready to underwrite cases, and what sort of costs will be involved?

Mr. Hoon: The Lord Chancellor and I have held a series of meetings with representatives of the insurance and financial services industries. We are keen that they should provide financial support, particularly to underpin the extension of conditional fee agreements, and we have every confidence that such support will be available and will continue to be available.

General Pinochet

Mr. Chris Mullin: What is the cost to date in legal fees to British public funds of the attempt to extradite General Pinochet; and if he will make a statement. [65861]

The Minister of State, Lord Chancellors Department (Mr. Geoffrey Hoon): Before the case is concluded, it is difficult to give a reliable indication of costs. The costs of the Crown Prosecution Service cannot yet be separated out because CPS staff are engaged in a variety of cases at any time. However, the fees of counsel instructed by the Treasury Solicitors Department are £105,000, of which £18,000 is recoverable under a costs order made against Senator Pinochet in the divisional court.

Mr. Mullin: Can my hon. Friend assure the House that in the unhappy event of General Pinochet's managing to escape extradition, his legal bills will be rigorously scrutinised before they are passed on to the taxpayer?

Mr. Hoon: I can certainly give my hon. Friend that assurance. Given the history of this case, the question of who should pay any costs, and in what proportion, is inevitably difficult and rather complex, especially before

the case is finally resolved. The matter will ultimately be for their lordships to decide—perhaps after further legal proceedings.

Mr. Edward Leigh: How much did Lord Hoffmann's failure to declare his interest cost public funds? The Minister will recall the fuss about the Scott inquiry in the previous Parliament. Why, in this Parliament, must the President of the Board of Trade resign because he failed to declare an interest, while a judge such as Lord Hoffmann, who had a direct personal interest in the case, gets off literally scot free?

Mr. Hoon: The question of who should pay those costs and those parts of the costs will be a matter for their lordships to determine at the conclusion of the case. I am not able to assist the hon. Gentleman further on that point at this stage.

Mr. David Winnick: Is my hon. Friend aware that, whatever public money is spent, it will be well justified in trying to bring a former criminal dictator to justice—

Madam Speaker: Order. The hon. Member knows the sub judice rule in the House. That question was quite unnecessary. I had hoped that it would be rather more positive, and deal with legal fees, as the original question demands.

Sex Offenders

Mr. James Clappison: (by private notice): To ask the Secretary of State for the Home Department whether any prisoners currently serving sentences as a result of convictions to which part I of the Sex Offenders Act 1997 applies will be released under home detention curfew on 28 January, and if he will make a statement.

The Minister of State, Home Department (Mr. Paul Boateng): I do not expect any sex offender to be curfewed on home detention curfew on Thursday. Governors have been instructed that no sex offender should be considered for home detention curfew unless there are exceptional circumstances, and then only if there is the clearest evidence of no risk to the public. In any case, any proposal to curfew such an offender will have to be approved by the Director General of the Prison Service.
As members of the Home Affairs Select Committee unanimously recognised recently, home detention curfew will improve the transition of short-term offenders from custody back into the community, by providing order into often chaotic life styles. It will encourage offenders to take greater responsibility for finding a stable address. Prison governors have already reported a much greater willingness by prisoners to make suitable release arrangements. Prisoners discharged to a stable address, and curfewed to that address for at least nine hours a day, are much less likely to reoffend. The scheme is first and foremost about protecting the public.
I shall set out the conditions under which an offender may be placed on home detention curfew, which the hon. Member for Hertsmere (Mr. Clappison) will want to hear. First, only offenders serving between three months and four years will be eligible. Secondly, only prisoners who do not pose a risk to the public, do not pose a risk of reoffending, are likely to abide by the curfew conditions and who have a suitable home address will be allowed on home detention curfew. Prisoners who fail any of those tests will complete their sentence in prison. On Thursday, I expect no more than about 50 prisoners to be curfewed. None of those will be offenders under part I of the Sex Offenders Act 1997.

Mr. Clappison: Is the Minster aware of the depth of public concern about sex offenders and the publics desire for the strongest possible protection from the risk that such offenders pose? Is he aware that Opposition Members have all along expressed concern about sex offenders with regard to the Governments programme of early release from prison facilitated by electronic tagging? In view of the grave risk involved in such cases, should not the Government be in possession of relevant information and have a grasp of what is going on?
According to written answers provided last night, the Government were able to say only that, out of the 135 prisoners eligible to be considered for release, fewer than 10 were sex offenders. They could not give the exact figure. When it came to the number of prisoners actually to be released, we were told that the information would be available only after 28 January.
At the start of his statement, however, the Minister told us that he expects no sex offenders to be released, but, at the end of it, he told us that no such prisoners will be released. What is the case? Does the Minister know whether any of those prisoners will be released? If the answer is that no such prisoners will be released, why could not the Government give that information yesterday evening? Why are the Government suddenly able to produce that figure today, when they were unable to produce it yesterday, after months and months of preparation for the scheme, which was first announced by the Government as long ago as November 1997? Does not that show a Government who, at the very least, are slipshod when it comes to obtaining and imparting vital information on an important subject?
For the future, will the Minister tell us now approximately how many sex offenders will be eligible for release when the scheme is up and running, given that more than 7,000 prisoners in the prison population are eligible for release, and 4,000 will be on early release as a result of tagging at any one time? The Minister looks perplexed. I hope that those facts do not come as a surprise to him, because they are contained in answers that his Department has given. He should know that information. Will he tell us now how many of those offenders might be sex offenders? Will he give us an assurance now that, when Ministers actually find out how many sex offenders will be released and discover what is going on, they will give the House that information in good time? Will they ensure that they obtain that information?
Finally, will the Minister give us a definite assurance today that no sex offenders will be released on Thursday of this week? Is the answer to that yes?

Mr. Boateng: I am looking perplexed only at the hon. Gentleman's apparent lack of ability to listen to what I have said. No sex offenders under part I of the Sex Offenders Act 1997 will be released on Thursday—none, not any. I hope that the hon. Gentleman has heard me and understands me.
The hon. Gentleman must also understand the difference between eligibility for consideration under the 1997 Act and the circumstances in which someone would be adjudged to be of a degree of risk such that it would be safe to enable him to leave under the conditions of the home curfew. The point of the home detention curfew is to ensure that the public interest is protected. It will be protected, it has been protected, and we shall monitor the release of all prisoners under the home detention curfew in a way that will ensure that the purposes of the home detention curfew are met.
Before the hon. Gentleman starts playing party politics with the home detention curfew, he needs to understand that each and every member of the all-party Home Affairs Select Committee—including the hon. Members for Woking (Mr. Malins), for Surrey Heath (Mr. Hawkins) and for Aldershot (Mr. Howarth)—supports home detention curfews. The aim of those curfews is to protect the public, and we shall ensure that the public are protected.

Military Action Against Iraq (Parliamentary Approval)

Mr. Tam Dalyell: I beg to move,
That leave be given to bring in a Bill to require the prior approval, by a simple majority of the House of Commons, of military action by United Kingdom forces against Iraq.
Let me be brutally candid. I do not think that the Prime Minister, the Foreign Secretary and the Defence Secretary—along, it had better be said, with most Members of the House of Commons, and the President of the United States and Mrs. Albright—have any real notion of the horror that is being unleashed against the people of Iraq.
The trite phrase,
We have no quarrel with the people of Iraq
is cant. Sanctions and bombing are actions that harm no one but the Iraqi people. If the Prime Minister had understood the high-tech savagery of that to which he was giving his agreement, he would never have allowed himself to step out of No. 10 Downing street in front of a Christmas tree to announce military strikes, and he certainly would not have chosen to be photographed, as he was, in the cockpit of a Tornado aircraft in Kuwait.
My right hon. Friend sitting next to me, the Member for Chesterfield (Mr. Benn), has served in war, as has the right hon. Member for Old Bexley and Sidcup (Sir E. Heath). Some other hon. Members have experienced the V1s and V2s attacking London. I have experience only of firing guns on ranges in Lulworth and HÖhne-Belsen in Rhine Army, but the smell of cordite and the din were enough to give an inkling of the awfulness of bombardment.
Those colleagues who for age reasons have never served in the forces, and who have been inoculated against weapons of mass destruction by watching Indiana Jones and the like on television—I make no criticism of that—may have little real grasp of the enormities that are currently being perpetrated in our name.
We all gape at the fireworks over Baghdad from the comfort of our living rooms. When, with my hon. Friend the Member for Glasgow, Kelvin (Mr. Galloway), I saw the end result of laser-guided bombs, as I did at the Amariya—the shelter—in Baghdad in 1994—the carbonated torsos of women and sheltering children imprinted on the walls—it had the same sort of effect as when I saw the holocaust museum in Jerusalem.
It is not simply a matter of actual death and destruction. Imagine having young children in a city of 4.5 million, screaming every night, traumatised at the deafening sounds all around them. We must imagine terrified old people, bewildered by the west using high-tech to frighten them out of their wits.
The Prime Minister, quite honourably, sets out his stall as a Christian socialist. He will therefore know his Augustine and his Aquinas. Did they not have a good deal to say about everything possible being done to avoid war, as a condition of a just war? By no stretch of the imagination has that been done. There has been no light at the end of the tunnel on sanctions. It is not only my sponsors and I who think so.
For example, Archbishop Edwin OBrien, the archbishop of the archdiocese for United States military services, has said that the US bombing of Iraq is morally

questionable, and that US military personnel should question their actions if ordered to take an action that is a clear
violation of the moral law.
Archbishop O'Brien said in a statement to the Catholic chaplains serving the US armed forces around the world that soldiers, airmen, seamen and marines
are not exempt from making conscientious decisions
when confronted with immoral orders. He continued:
I join the bishops of our country as well as the concerned voices of the Holy See and other hierarchies in calling on our president and his advisers to initiate no further military action in the Middle East.
The archbishop praised the professionalism of the US military and noted that they are subject to the policy decisions of US elected leaders. He stated:
Once civilian leadership decides a policy requiring military action, it is the sworn obligation of all in our armed forces to execute their mission in complete obedience unless in a specific instance the required action is judged clearly illegal or immoral.
I am not criticising the armed forces of Britain or the United States, but Archbishop O'Brien stipulated the conditions under which a soldier decides the morality of an order. He asserted:
In executing orders that might violate just war requirements military personnel face a serious moral challenge … Any individual who judges an action on his … part to be in violation of the moral law is bound to avoid that action.
He went on to state:
When clear moral conclusions that a particular act is unjust cannot be reached because, for example, of lack of sufficient evidence, the individual is justified in following the presumably better informed decision of his or her superiors.
We must take that into account.
If I make my argument personal to the Prime Minister, the Foreign Secretary or the Defence Secretary, it is because members of the Cabinet are letting it be known that even they were not consulted about the current bombing, or the moral issues involved. Britain is, after all, supposedly a parliamentary democracy, not a presidential state.
The real object of the Bill is to try to bring home to each Member of Parliament, by vote, and each member of the Government exactly what he or she is supporting, and the moral dilemmas, such as those outlined by Archbishop O'Brien, that they face—death of civilians; inevitable collateral damage; making Saddam Hussein into a latter-day Saladin, even more popular with the Arab masses, if not with the Al-Sabah family in Kuwait, than was President Nasser in his heyday; and making little dent on mobile weapons which, if they exist, were certainly not found by UNSCOM.
Let us not pretend that this is a clear legislative proposal, in its final form. I make no such claim. There may be occasions on which the secrecy of an SAS strike is justified. It could, for instance, be an operation to rescue British nationals: in such cases, surprise is of the essence. There could be other occasions on which a response might be called for—a response to a perceived or actual scud missile attack.
No; what the Bill is about is the simple proposition that, in circumstances in which Britain is embarking on a protracted military operation with no clear end in sight, Parliament must be formally consulted and a decision must be made by majority vote, before our country drifts


into a conflict whose consequences and objectives are far from clear. Incidentally, there is also a real risk that such a conflict could undermine the United Nations. It is no good talking about the authority of the United Nations when three out of its five permanent members—Russia, China and France—are against the proposals. There are also real questions to be asked when UNSCOM, which I visited seven weeks ago in Baghdad, turns out to be a nest of spies.
Before we got deeper and deeper into what could so easily turn out to be a Vietnam-like conflict with Iraq, the pros and cons should have been hammered out on the anvil of parliamentary argument. Had that been allowed to happen, this question would have been asked to the point of tedious repetition: What do we do after we have bombed and bombed and bombed? If the phrase keeping Saddam in his cage has any meaning at all, it surely means conducting a state of war for the foreseeable future.
As hon. Members who were here in the 1980s may recollect, I was no admirer of Mrs. Thatcher, but give her due: she at least agreed to, and possibly initiated, the recall of Parliament on 3 April 1982 to secure the imprimatur of the House before sending the fleet to the Falklands. In the case of Iraq—although it is arguable what the House agreed to in February 1998—that has not happened, at any rate not recently.
Hon. Members on both sides of the House who might take a diametrically opposite view from that of my right hon. Friend the Member for Chesterfield, the Bills sponsors and other Labour Members on the substance of the Iraq issue could feel perfectly comfortable about voting for at least allowing discussion of a Bill that is about clarity of thinking on military objectives, and about the proposition that before men and women are asked to risk their lives there ought to be a decision by vote in a democratically elected Parliament.
Finally, and ironically, there is a reason why the Bill should commend itself to the Prime Minister: it gives him time—a breathing space—in his dealings with the President of the United States. If the President says, Prime Minister, will you support a decision in favour of sustained bombing?, it is surely much better—

Madam Speaker: Order. Time is up.

Question put and agreed to.

Bill ordered to be brought in by Mr. Tam Dalyell, Mr. Tony Benn, Mr. Harry Cohen, Mr. Jeremy Corbyn, Mr. George Galloway, Mr. Neil Gerrard, Dr. Ian Gibson, Mr. John McAllion, Mrs. Alice Mahon, Mr. Robert Marshall-Andrews, Mr. Dennis Skinner and Audrey Wise.

MILITARY ACTION AGAINST IRAQ (PARLIAMENTARY APPROVAL)

Mr. Tam Dalyell accordingly presented a Bill to require the prior approval, by a simple majority of the House of Commons, of military action by United Kingdom forces against Iraq: And the same was read the First time; and ordered to be read a Second time on Friday 16 April, and to be printed [Bill 35].

Point of Order

Mr. Iain Duncan Smith: On a point of order, Madam Speaker. I seek your guidance on todays debate on the working families tax credit and the Tax Credits Bill. The debate should be adjourned almost immediately for the following reasons. First, notwithstanding Government assurances, there is no reference in the Bill to the child care tax credit which forms a critical and crucial part of the measure. What is most intriguing is that at the time of the 1998 Budget, the Chancellor said:
We will introduce a new child care tax credit as part of the working families tax credit.—[Official Report, 17 March 1998; Vol.308, c. 1106.]
The Paymaster General, who will advance the course of the Bill, said on the Today programme this morning:
The really important element for women is the presence of the child care tax credits.
However, there is no reference to child care tax credits in the Bill. The public are, therefore, being misled. Unless child care tax credits are included in the Bill, the cornerstone of the measure cannot stand and there is no purpose in debating it until it is included. The Government have made no attempt to explain why the child care credits have not been included.
Secondly, the Government also promised an impact assessment. Page 18 of the explanatory notes states:
A regulatory impact assessment will be published … in time for the detailed debates on the primary legislation.
No such statement has been published and that makes the debate of the Bill a pointless exercise. A statement about the huge costs that businesses are likely to incur has not been published so that businesses can take a view on the matter.
The third reason is a supporting point. The Bill has been framed with massive Henry VIII clauses, of which clause 10 is a classic example. Little in the Bill is provided in the detail necessary for the public, through Members of Parliament, to scrutinise the measure and decide whether it is a serious proposal, or merely a Government exercise in dogma.

Madam Speaker: I am grateful to the hon. Gentleman for giving me some notice of his point of order. The circumstances of a Bills introduction and its contents are exactly what a Second Reading debate is all about. The hon. Gentleman should seek answers to his questions in the debate that will follow. In fact, he must argue his case for the Bills rejection through debate.
Furthermore, it might assist him if I tell the hon. Gentleman and the House that I have selected the reasoned amendment in the name of the Leader of the Opposition. In doing that, the hon. Gentleman and his colleagues will be able to vote for that amendment and against the Governments Bill, to try to reject it. He must raise his points through debate with the Ministers who will be handling the Bill.

Orders of the Day — Tax Credits Bill

[Relevant documents: The First Report from the Social Security Committee, Tax and Benefits: Implementation of Tax Credits (HC 29) and the Government Response contained in the Second Special Report from the Social Security Committee (HC 176).]

Order for Second Reading read.

Madam Speaker: I inform the House that I have selected the amendment in the name of the Leader of the Opposition.

The Paymaster General (Dawn Primarolo): I beg to move, That the Bill be now read a Second time.
I am delighted to be opening the debate on the Second Reading of the Tax Credits Bill. Families are the bedrock of a stable and healthy society, and in a fast-changing economy—with its uncertainties and vulnerabilities—families, now more than ever, need security of support when bringing up children.
The Government are determined to support families by making sure that work pays and by helping people to move from welfare into work. The working families tax credit and the disabled persons tax credit are central elements of our strategy. It is shameful and a condemnation of the major opposition parties that they are not prepared to be on the side of working families, and that their amendments would prevent the assistance that the Bill will provide. Despite all that they say about supporting families, they really want to maintain a system that could be improved only by the introduction of the working families tax credit, which would especially help those who are in work, but on low incomes.
The working families tax credit will provide £4.5 billion a year and support 1.3 million working families. That is a contribution of £17 a week more in the system and it will help families. The hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) should explain why the previous Conservative Government agreed with support for child care and for families. They apparently agreed with ensuring that the poverty trap was eased and that people should be helped into work. It is just that the mechanisms that the previous Government put in place did not deal with that problem. When the hon. Member for Chingford and Woodford Green rises to the Dispatch Box, perhaps he could answer that question.

Mr. Iain Duncan Smith: Will the hon. Lady, who has to give the explanations, please explain to the House and to the public why, this morning, she indicated that the child care tax credit section was in the Bill, when it is not? Why is it not in the Bill as it is such a cornerstone of the whole policy.

Dawn Primarolo: The Bill provides for the transfer to the Inland Revenue of the family credit unit and, as the hon. Gentleman has rightly pointed out, for the development and explanation of those measures through regulations. As he knows full well—because, presumably, he has read, for example, the House of Commons briefing on the matter—both the assessment of the impact on

business, which is to be available for the Committee, and the details of the Bill, which are to be available for the Committee, will enable the detailed discussion that he claims that he requires.

Mr. John Bercow: Will the hon. Lady give way?

Dawn Primarolo: Hang on a minute.
In opening the debate, I am laying out the major points that will be covered in the Bill, which the Committee will be able to scrutinise. If the hon. Member for Chingford and Woodford Green wanted to pursue that, he could have chosen to speak first from the Dispatch Box today, but he chose not to. I would certainly welcome him on the Committee that considers the Bill in order to pursue those matters.

Mr. Duncan Smith: Will the hon. Lady give way?

Dawn Primarolo: No, I want to make some progress. I have answered the hon. Gentleman's points. He just does not like the answer and the fact that there are responses to the details that he seeks. He is trying to conceal the fact that his party has said that it wants to repeal—if it were fortunate enough to be elected again—the working families tax credit and to take away from working families all the benefits that the Bill provides for. I am not surprised that he is embarrassed, and that he wants to take the debate in another direction and shout at me from a sedentary position.

Mr. Duncan Smith: Will the Minister simply answer the question that she was asked? Nothing in the Bill refers to the child care tax credit. Why is that the case? Why have the Government left it out and how will they bring it in?

Dawn Primarolo: The child care tax credit has not been left out. The Bill gives us powers to introduce it. We are discussing the powers that are being transferred to the Inland Revenue to deliver the tax credit; the regulations provide for that. It has been made clear that the details will be available for the House, including the impact assessment, which has been conducted very thoroughly with business, with which we have co-operated over the past year.
The reason why the Opposition want to pursue that line of argument is because they do not want me to lay out the details. I will make some progress in the hope that I make it clear to Opposition Members exactly what is being proposed in the Bill.
The Bill is targeted at families with children, on low to moderate earnings, for whom the unemployment and poverty traps are particularly severe. It will help to encourage people to move from welfare into work by improving incentives. It will give families with children a guaranteed minimum income of £10,000 a year—£190 a week. That is the message that Opposition Members want to prevent being delivered in the House.
The Bill will remove the obstacle of the lack of affordable child care that affects so many families. As the hon. Member for Chingford and Woodford Green said, in transferring the family credit unit to the Inland Revenue, what is important is that the Revenue is given the powers


to remove that obstacle, which is what the Bill provides for. It will also enable those who are disabled to make the transition from welfare into work more easily, and provide a guaranteed minimum income for those who do so.
The working families tax credit is complemented by other key Government policies that will make work pay and help people move from welfare into work. The national minimum wage—

Mr. Bercow: Will the Minister give way?

Dawn Primarolo: No, I want to make some progress. I know that just mentioning the national minimum wage forces the hon. Gentleman to his feet, but I have been asked to explain how the system will work and I am about to do so.
The national minimum wage will ensure greater decency and fairness in the workplace by removing the worst excesses of low pay. From 1 April, all adult workers will earn at least £3.60 an hour, benefiting another 2 million workers, two thirds of them women. Opposition Members oppose that policy. They do not want to help the poor earn more despite the fact that last week they were claiming to be the champions of the poor.
We are increasing child benefit by £2.50 a week from April, in addition to the normal uprating for inflation. When the Conservatives were in government, they did not do that. They did not invest in children or address those issues. At £130 extra a year, it is the biggest ever increase in child benefit.
We are also reforming national insurance to remove the barriers to work for the lower paid. From April, we will cut the burden on all employees—a gain of more than £65 a year. We shall introduce a 10p starting rate of income tax when it is economically right to do so.
There is an increasing polarisation between working and non-working families. The proportion of households with at least one adult of working age out of work has doubled since 1979 when the Conservatives were elected. Those in workless households account for a growing proportion of those living in poverty.
The youngest in our society have often suffered most. A third of all children in Britain live in poverty and half of those live in households with no one in work. That is the Conservative legacy. They failed to address the issue and now try to stop us dealing with it.
The Government believe that the best way to tackle poverty is to help people into jobs. That is good for people and for the economy. Everyone in Britain has talents and potential, and we can all benefit from people being able to use their talents and fulfil their potential.
To help people into jobs, we must improve skills and employability. We must also reform the tax and benefits system that fails to reward work and does not enable people to climb the earnings ladder.

Mr. Bercow: I thank the Minister for giving way and congratulate her on her recent promotion. Why has expenditure on the working families tax credit, which will be approximately £1.5 billion a year greater than the cost of family credit, been taken out of the mainstream Department of Social Security figures and instead listed under the Governments comprehensive spending review, under the heading Accounting and other adjustments?

Dawn Primarolo: The Governments presentation of accounts is hotly pursued for clarity, and the way in which

they account for expenditure is clearly set out in recommendations. If the hon. Gentleman looks at the requirements, he will see that the accounting for the working families tax credit follows those recommendations.

Mr. Eric Pickles: Will the Minister give way?

Dawn Primarolo: No. The hon. Gentleman will have the opportunity to speak from the Front Bench later, when I am sure that he will make his points forcefully. I must make some progress.
The unemployment trap means that those in work can earn little more than those out of work. The system fails to recognise the costs of child care. It imposes marginal tax rates on more than 70 per cent. of 750,000 families and it puts a ceiling on the aspirations of men and women wanting to work their way up. The working families tax credit is central to overcoming those obstacles.
The working families tax credit will replace the existing family credit benefit. Under the working families tax credit, those with families who are on low incomes working at least 16 hours a week will be entitled to a basic tax credit, and an additional credit for each child. A credit will also be given for working more than 30 hours a week and, to help with child care costs, there will be a child care tax credit of up to 70 per cent. of a maximum of £105. We have increased the threshold at which the tax credit is withdrawn from £79 to £90. We have cut the taper so that the tax credit will be withdrawn more gradually, easing the transition for those moving from unemployment into work and up the earnings ladder.
The disabled persons tax credit builds on the disability working allowance in the same way as the working families tax credit builds on family credit, and contains a new child care tax credit. These are provided for within the Bill and the detail of the regulations.

Mr. Steve Webb: The Minister has described the new structure. Could she confirm that the 300,000 poorest recipients of family credit who get the maximum amount will not get a penny extra unless they have child care expenditure?

Dawn Primarolo: The hon. Gentleman will know that the change in the taper means that the withdrawal is more gradual, and helps more families claiming the benefit. [Interruption.] Madam Speaker, I am answering the question from the hon. Member for Northavon (Mr. Webb), and it is very difficult with a constant barrage from the Opposition. However, I will do my best.

Madam Speaker: I understand. I am sure that Opposition Front-Bench Members will bide their time until they get to the Dispatch Box. I look forward to hearing what they have to say.

Dawn Primarolo: As the hon. Member for Northavon will know—and as Opposition Front Benchers would know if they listened—the working families tax credit means that as people earn more, they will be able to keep more. That is the whole point of having a work incentive—to encourage people to work.
For many families—especially lone parents—the costs of child care are a major obstacle to work. In the past, that has been recognised by the Conservative party. Apparently, however, the party no longer wishes to recognise that fact. In the past, the problem of cost and access to good quality child care has denied many parents the opportunity to rejoin the work force. Not only has that had an effect on parents confidence in their own abilities, it has denied Britain a major pool of talent and potential.
The previous Government accepted the principle of providing help with child care costs for those who go out to work. The former Secretary of State for Social Security, now the deputy leader of the Conservative party—the right hon. Member for Hitchin and Harpenden (Mr. Lilley)—said in his first Spectator lecture on 30 March 1994 how important it was to reduce the disincentives for people to return to work and how important a child care disregard was in assisting with child care costs.
In his press release announcing the child care disregard, the right hon. Member for Hitchin and Harpenden said:
These measures will provide a real incentive to encourage parents to return to the job market.
He also said that lone parents, in particular, would also benefit from the maintenance disregard. Unfortunately, the high hopes for that provision never materialised. Yet the Opposition are now saying that they do not support an improved scheme. Having designed a policy that failed, they are not prepared to support a policy that will succeed.
We are determined to ensure that no one is unable to take up work through lack of access to affordable, quality child care, and we are determined to help parents better balance work and family responsibilities. We are introducing a child care tax credit, combined with the national child care strategy. It is designed to make child care support more generous and transparent by providing up to 70 per cent. of the eligible child care costs, up to a maximum of £105 a week for those with two or more children. I am grateful to my hon. Friends, and especially women Members, who have emphasised strongly the importance of child care provision so that women who want to return to paid employment have that route open to them.

Mr. Pickles: I, too, congratulate the hon. Lady on her new post.
Why is it necessary for the Inland Revenue to make the payment, rather than paying it directly through the Department of Social Security?

Dawn Primarolo: That is the point of the Bill. It is an in-work incentive, designed to encourage people to return to work, to remove the stigma associated with the current system and to ensure that we can provide a tax credit. I thought that that was clear to the hon. Gentleman.

Mr. Geraint Davies: Do not the two most recent interventions clearly illustrate the fact that the Opposition cannot distinguish between a tax credit, investing in opportunity and work, and a social

security benefit, which is about investing in the dependency culture of failure that we inherited? That is why they are in opposition and not in government.

Dawn Primarolo: Conservative Members do not like to discuss whether they failed to provide in-work incentives, the consequences of their failure to help those in paid work on very low incomes, or their failure to tackle the poverty trap or the unemployment trap. I am not surprised that they do not want to discuss the child care tax credit, because they know that it has been widely welcomed by child care groups and womens organisations. It is an example of how the Government are not only talking about helping children, but delivering help where it matters.
The working families tax credit supports families on low incomes and provides them with a real incentive to work. Working families in full-time work will have a guaranteed income of at least £190 a week, and no family with a wage packet of less than £220 a week will pay any net income tax. That is the highest effective starting point for income tax in 30 years.
The working families tax credit will cut by two thirds the number of families facing marginal tax rates of more than 70 per cent., and it will remove the last grotesque inheritance in this field from the previous Government—instances in which 100 per cent. effective tax rates were imposed on the very worst-off in our communities. The new system will encourage families to try to earn more, as they will get to keep more of what they earn. That is a crucial element in encouraging people into working.
The working families tax credit will retain an additional tax credit for people working more than 30 hours a week, which will encourage those who are employed to move from part-time to full-time work and so move up the employment ladder.
The disabled persons tax credit will help people who have an illness or a disability to find or keep a job. It is more generous than the existing disability working allowance, to ensure that people are better off moving from benefit to work.
Our aim is to create a real incentive to work, and to provide genuine encouragement to move from welfare to work. To reinforce that, we are reforming the system to provide extra help and support through the tax system. The Bill will also remove the stigma of claiming benefits.
I note, for those keen listeners of The Archers, that the scriptwriters recently recognised the problem of stigma. Only last week, apparently, Joe Grundy did not want Clarrie, his daughter-in-law, to fill in her application form for family credit because he did not want the stigma of claiming benefits. Even the scriptwriters on that programme recognise the stigma that is attached to the present benefit, although I am not sure that Conservative Members do.

Miss Julie Kirkbride: Will the hon. Lady give way?

Dawn Primarolo: Not at the moment.
The tax credit will be administered by the working families tax credit unit in the Inland Revenue, which has been working hard with other Government Departments and interested bodies outside, to ensure that the new system is up and running by October 1999.
From April 2000, the tax credits will be paid to employees through the pay packet or directly to the self-employed by the Inland Revenue. The tax credit is also flexible because it provides couples with a choice about who claims and receives it, which means that each family will be able to decide how the tax credit is paid to suit best their individual circumstances.

Miss Kirkbride: Will the hon. Lady explain why she believes that greater stigma is attached to claiming a benefit, which is essentially anonymous because the cheque comes through the post and no one knows about it except for an anonymous person who works for the Benefits Agency? Under her new system, employers will know the precise circumstances of their employees. Conservative Members argue that greater stigma attaches to the employer knowing the personal circumstances of the individual than the anonymous Benefits Agency. Will she respond to that point?

Dawn Primarolo: The hon. Lady knows full well the arguments about family credit and the stigma that many people attach to applying for it. She is wrong in her assertion that the employer will know all the details of an employee. That will not be the case. The employer will simply be directed to pay a specific amount to the employee. Therefore, there is no way that he or she will know the details of an individuals circumstances, or be able to find them out. Clairvoyance may be a talent of some employers, but not all. The information will not be disclosed to them.
The Conservative party has made clear its opposition to WFTC and DPTC. The shadow Secretary of State for Social Security told the House that the Conservatives would cut the working families tax credit, thereby decreasing the budget dramatically. They should explain why they are prepared to take away an extra £ 1.5 billion from the poorest working families. I think that the hon. Member for Brentwood and Ongar (Mr. Pickles) wanted me to give way to him before I sat down. Does he wish to intervene?

Mr. Pickles: indicated dissent.

Dawn Primarolo: Earlier, the hon. Gentleman asked whether he could intervene, but he does not have to do so.

Mr. Pickles: Perhaps because of the excitement of the occasion, the hon. Lady does not realise that she has already given way to me. This morning on the Today programme, she was keen to say that no extra money was involved in the working families tax credit and yet it has been conclusively demonstrated that an extra £1.5 billion will be involved. Will she take this opportunity to withdraw her misleading statement on that programme?

Dawn Primarolo: My interview was not that early in the morning, so I am surprised that the hon. Gentleman was not as awake as he might have been. If he checks the record—Conservative Members seem to be informing me that they have—he will see that there is no inconsistency in what I said.
The Oppositions amendment contains some fundamental errors and misunderstandings about the Bill. They claim that it would penalise women, when it would not do so as it would give them a choice. I remind the

House that 50 per cent. of family credit claimants are single families headed by women, who will still receive the payment direct. I note that the hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith) is laughing.
Another group of women are the primary wage earners for the family. In families where both parents are wage earners, they will be able to choose who receives the credit. The self-employed are another group who must be considered. The Opposition are trying to say that the measure will discriminate against women, or families, and that they will be worse off. That is simply not true.
The Opposition claim that there will be extra burdens, especially cash-flow problems, on business. That is also being dealt with in discussions with companies to ensure that there is no cash-flow problem and that companies are supported. Companies will be required to deduct the working families tax credit payments that they have made from the pay-as-you-earn and national insurance payments that they have collected, and pay the difference to the Inland Revenue. Where employers do not have enough money to meet the full obligation, they can apply for a grant that will be paid by the Inland Revenue to ensure that there is no loss to companies in making the payment.

Mr. Archy Kirkwood: The Minister cannot deny that she is constructing an elaborate edifice of administrative change. I listened carefully to her analysis and have no difficulty with her aspirations, which are logical. Most people would agree that it is right to try to get people off benefit and into work. I want some idea of what targets the Government have set for the measures success. Does she have any operational research that suggests how many people will be persuaded to take this route from benefit into work?

Dawn Primarolo: The Government expect that 400,000 more people will want to claim the working families tax credit in the period when we move from family credit to the fully operational new system. Take-up is clearly linked to eligibility and information. That was to have been my next point; we are talking about supporting another 400,000 families. The guaranteed minimum income for working families of £10,000 a year is crucial to that.
The case is clear. The Bill makes economic sense, provides support for families, gives families incentives to work, eases the taper in helping people move from welfare into work, gives them certainty, and provides for a child care credit. That means that we have put in place the support that is necessary for families hitherto prohibited from moving back into paid employment.
The Opposition, in their amendments, simply want to return to a system that has failed and to deny families the support that they would otherwise get. They do not acknowledge the failure of the child care credit within the family credit system, or recognise that the working families tax credit system is better and that more families will be assisted. I urge my hon. Friends to support the Government, vote for Second Reading and support us in Committee, where the full details can be clearly spelt out.

Mr. Eric Pickles: I beg to move, To leave out from That to the end of the Question, and to add instead thereof:
this House declines to give a Second Reading to the Tax Credits Bill because it will increase the costs of social security when the Prime Minister has pledged to cut those costs; and it will increase benefit dependency, stigma, fraud and business costs, whilst undermining family structures.
There is some consensus on this matter in the Chamber. We share the Governments aspirations and want such measures to succeed, but we doubt whether the Bill will work. It proposes to remove a highly successful benefit, understood and trusted by the British people, and replace it with a tax credit that will increase dependency, stigmatise low-income families and place a heavy burden on small businesses. On the Governments own figures, the measure will add £1.5 billion on top of family credit. It breaks the Prime Ministers pledge to cut the growth in the social security budget. It is a dangerous Bill that will do great harm to the support of working families on low incomes.

Mr. Geraint Davies: May we have a clear commitment tonight that in their manifesto for the next election the Conservatives will pledge to repeal the working families tax credit? Yes or no?

Mr. Pickles: The hon. Gentleman, who I am sure is a very nice person, has been sadly let down by that appalling daily note sent out by the Labour party. It included an incomplete quote. Of course we do not want to see this measure brought in—we prefer family credit—but we recognise too that once we take control there will be people banging on the doors demanding a change from this lousy system. They will want us to address the problems.

Yvette Cooper: Is the hon. Gentleman now committed to supporting the additional £1.5 billion of spending that will go into the working families tax credit, which his colleague on the Front Bench, the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), said that he wanted to cut?

Mr. Pickles: Again, the hon. Lady has been let down by her Whips. We are saying clearly that when we take control we will have to build on what the Government have done and improve on it. We have made it clear that we will pursue the matter of the extra £1.5 billion. The Government will have their way in Committee and we will have to deal with the problems that they create. Then the hon. Lady will probably be urging us to deal with the problems.

Dawn Primarolo: I am grateful to the hon. Gentleman for giving way so that I can be clear about what he is saying. Is he saying that when the Government introduce these measures and they are a success, his party will not repeal them if it is ever re-elected? Is he contradicting what the hon. Member for Chingford and Woodford Green has previously said?

Mr. Pickles: We are saying that when we return to power there will be a groundswell of opinion among the public—people receiving the tax credit and people who

have to administer it. They will say, We want this changed. We will respond because we are that kind of party. I do not know why the hon. Lady is getting so excited.

The Financial Secretary to the Treasury (Mrs. Barbara Roche): The hon. Gentleman has been extremely generous in giving way. I am anxious to follow his argument. I understand his argument thus: should his party have the great good fortune to return to power, there will be a groundswell of opinion among the British public, who will say, We now do not want this extra £17 a week. Please take it away, and the Conservative party will do so. Is that what he is saying?

Mr. Pickles: It is acceptable for Back Benchers to be misled by the Whips, but the Minister should know better. She knows that a considerable amount of that money will be taken up by the cost of administering this very difficult and expensive system. Now, to use a time-honoured phrase, I must make some progress.
This Bill, perhaps more than any other that I have debated in the House, is dependent on secondary legislation. It is a skeletal Bill that Ministers will fill out at their leisure. We know that an entire tax credit is missing. The child care tax credit is something that the House of Commons Library describes as an integral part of the working families tax credit and the disabled persons tax credit. It is so integral that the Paymaster General spent considerable time on the Today programme saying how important it was. In an exclusive interview with the Daily Mirror, she spent a lot of time explaining how important child care credit was. Yet there are more column inches devoted to child care tax credit in her exclusive in the Daily Mirror than in the Bill. That is not hard, because there are no column inches devoted to child care tax credit in the Bill.
As the House tramples the boards of this Marie Celeste of a Bill, we will have to have important details filled in later. There is a frightening preponderance of Henry VIII clauses in the Bill. As the song goes, Every one was an Tnery. It is ironic that the Government, who boast so often that they are the great modernising Government, should now have as an unsung hero a Tudor monarch.
These concerns are shared by hon. Members on both sides of the House. In a recent report on tax and benefits, the Select Committee on Social Security expresses concern about the parliamentary scrutiny of skeleton Bills, saying that producing such Bills
makes Parliamentary scrutiny at that stage very difficult. The detailed rules are contained in statutory instruments made later, although at that point there is no practical opportunity for Parliament to comment substantively, or to amend.
When we consider statutory instruments, usually in Committee, our scrutiny is carried out on the basis of take it or leave it. We cannot amend or improve; we can only reject or approve. The Government are reluctant to withdraw measures, even when the arguments made in Committee are overwhelming. We are left a couple of weeks later with a polite note from Ministers saying that such and such a clause had an unforeseen, undesirable consequence and that they will amend it in a statutory instrument, to be tabled in due course. Such a solution is not satisfactory and makes bad use of parliamentary time.
In its report, the Social Security Committee recommended that there should be a new category of statutory instrument: a super-affirmative instrument, whose complexity and political importance warranted detailed investigation. If ever a Bill deserved to be dealt with on a super-affirmative basis, it is the one before us now. Matters as complex as the WFTC and the DPTC need full and effective scrutiny by Parliament; when the further complexity of the child care tax credit is added, that need is undeniable.
There are many questions about how the child care tax credit would work that require answers. The House needs to know whether it will penalise mothers who look after their own children, yet make it an advantage to look after other peoples children. We need to know whether the House of Commons Library research paper is right to assert:
The increased generosity of the tax will potentially create a situation in which parents will have a clear financial incentive to obtain registered child care rather than rely on informal networks, such as friends and relatives.
There are practical problems relating to who will qualify under the eligible child care criteria. There are three contradictory views. The Chancellor, in a report in the Financial Times last year, stated that
the Credit would only be available for registered and highly qualified child minding and child care.
However, section 71 of the Children Act 1989 states that a person who is a parent, relative, or foster parent of a child, or who has parental responsibility for a child is ineligible to be a child minder in respect of that child for the purposes of that Act.
Finally, we have the view of the assistant director of the personal tax division of the Inland Revenue, who gave evidence to the Select Committee. In response to a question asked by my hon. Friend the Member for Bromsgrove (Miss Kirkbride) about whether or not a mother could register as a child minder, he said:
There is nothing to stop anyone, if they can meet the conditions, and it is not for us to make a judgment on that, if they passed the conditions in previous years.
If that interpretation is correct, the £4 billion estimate of the cost of the child care tax credit produced by the Institute for Fiscal Studies is correct. Perhaps that is the real reason why the CCTC has been left out of the Bill.
Do the Government now intend to regulate and codify child minding? Will becoming a child minder in itself qualify a person for the working families tax credit? Those are decisions that should be taken by the House. From what we can glean from the Bill, the proposals penalise mothers who look after their own children and two-parent families. The House has a right and a duty to decide on that issue and to amend and fine-tune the Governments proposals, and not to be left with a take-it-or-leave-it dismissal.

Ms Sally Keeble: Does the hon. Gentleman accept that he has taken small pieces of a complex piece of legislation and juxtaposed them so as to make them look like a jumble, when it is perfectly clear that the proposals will provide flexibility of choice for working mothers and enable them to obtain appropriate and high-quality child care for their children?

Mr. Pickles: The hon. Lady has missed the point. We should make decisions about that complexity. The House

should have a view. Those arrangements should not be made by secondary legislation. My point is that the House will not be able to take a view because there is no mention of child care in the Bill.

Ms Keeble: Will the hon. Gentleman give way?

Mr. Pickles: No, I have been generous and I now want to make progress.
The Bill is vague, and not only about child care tax credit. We know that the Royal Association for Disability and Rehabilitation and other disability groups have expressed concern that people who receive the disabled persons tax credit will not automatically be entitled to free prescriptions, as they are with the disabled working allowance. The Minister will be aware that at a recent meeting with the Treasury and RADAR, the Government offered no guarantees about free prescriptions. Concern is also expressed about benefits currently available with DWA, including housing benefit and help from social services for children and young people in need.
Moving from family support to a tax credit is not an original idea of the new Labour Government. In the mid-1980s, the Conservative Government considered such a move and rejected it. I have no doubt that many hon. Members have a dog-eared copy of The View from Number 11: Memoirs of a Tory Radical by the former Chancellor, now Lord Lawson. For those who cannot abide the thought of taking that much-loved document out of the safety of their own library, his views on tax credits are reproduced in the House of Commons research paper 99/3.
The former Chancellor said that there was an overwhelming practical case for keeping the two systems apart. He argued that they are different in that one considers an individuals income and the other considers the income and capital of the individual and the family. I am sure that that is why he withdrew the proposals, but there may have been other reasons.
There was a great deal of opposition from another place and, more importantly, a near revolt by the national womens organisations in the Conservative party. At that time, I was a member of the national executive committee of the National Union of Conservative Associations. I have a vivid recollection of the heated debates on those proposals. The Conservative womens organisations made a positive case for continuing to ensure that income to support the family was paid to the wife, in much the same way as child benefit is paid to the mother. That is a classic case of the argument between the wallet and the purse.
Those arguments were eloquently put by the hon. Member for Regents Park and Kensington, North (Ms Buck), who said that in
most households, sole responsibility for meeting childrens needs is the womens domain; women are more likely than men to spend the income they receive directly on the family; and income in some households is unequally distributed which disadvantages women.
I have no idea whether the hon. Lady was, in a past life, a member of the Conservative womens organisation, but she describes the dilemma of the transfer of money from the purse to the wallet.

Mr. Peter L. Pike: When considering these proposals, it is important to remember that we are discussing not only replacing family credit with a working


family tax credit, which I am sure will be better for the low-paid people in a constituency such as mine, but an accompanying, important proposal to provide an increase in child benefit of £2.50—well above inflation—which will be paid directly to the mother. My hon. Friend the Paymaster General referred to that in her opening speech.

Mr. Pickles: The hon. Gentleman has been misled by the Minister, because the proposals go much further and will mean that families earning as much as £38,000 will benefit.

Mr. Chris Pond: Is the hon. Gentleman aware that a family earning £38,000 would need to have five children to qualify? Will he tell the House how many people would fit into that category?

Mr. Pickles: The hon. Gentleman's argument is inconsistent with that of his colleagues on the Front Bench, who have been bellowing, from a sedentary position, So are you against that, then?
The Henry VIII clauses might be better described as The Archers clauses—or, more specifically, the Clarrie Grundy clauses. The Paymaster General referred in passing to The Archers, but I think that she entirely misunderstood the Grundy familys problems. As regular listeners to Radio 4s serial about the everyday life of country folk know, the Grundys have fallen on hard times. The money-making schemes of husband Eddie and father-in-law Joe have come to nought: to get extra income, wife Clarrie has applied for family credit by obtaining a form from the local post office.
Under the Governments proposals, the money will not automatically be put into Clarries hands: it could arrive in her pay packet, or by way of her husbands. The latter possibility illustrates the problem described by the hon. Member for Regents Park and Kensington, North. Hon. Members will recall that, in recent episodes, Clarrie has been cheated out of a world cup ticket, council tax money has been misappropriated to meet the familys tax bill, and part of the £25 owed to Caroline Bone over a cushion cover has been used to buy two meat pies.

Jacqui Smith: Will the hon. Gentleman give way?

Mr. Pickles: No, I have been far too generous already.
I am confident that, if Clarrie gets family credit, she will use the benefit money for her boys. If Eddie or Joe gets hold of the money, I am equally confident that they will either spend it on madcap schemes or behind the bar of The Bull.
However, not all households are composed of lovable rogues. The Government must recognise that the more they use working families tax credit to shift income from the purse to the wallet, the smaller will be the amount spent on children.

Ms Keeble: Will the hon. Gentleman give way?

Mr. Pickles: I have been more than generous and have given way more than the Paymaster General did. I intend to make some progress, but if the hon. Lady is patient, I may give way to her later.
The Select Committee proposes that the default payment be made to the mother. The Government, I understand, are less enthusiastic.

Mr. Alan Johnson: Is that the end of The Archers?

Mr. Pickles: The hon. Gentleman will be pleased to know that I shall return to The Archers in due course. The programme is a very good plough to push: I shall come back to it again and again.
As I said, the Select Committee wants the default payment to be made directly to the mother. The Government are less enthusiastic, but are in favour of a choice on the form. We want that choice to be included clearly in the Bill.
One question must be resolved. If there is a conflict in the household, who will receive the payment? Should it go into the purse or into the wallet? Who will decide? Will the first result of the Governments much vaunted family policy be that it sets husband against wife?
Family credit is a remarkably successful benefit. It has a take-up rate of 72 per cent., and that rate rises to 85 per cent. when calculated by expenditure. No other benefit is so successful. According to the Joseph Rowntree Foundation, there is virtually no stigma attached to claiming family credit. The foundation is hardly a right-wing organisation, but it has stated that family credit
is often seen as a form of supplementary child benefit.
By contrast, the Institute for Fiscal Studies—which has no axe to grind—has observed:
As employers and the potential work colleagues would observe the WFTC, it might increase the stigma associated with receiving transfer payments and so decrease take-up.
Discouraging families from taking up the benefit is surely not what the Government intend.
Let us return to The Archers. We have examined the case for having the money go to Eddie Grundy, but let us suppose that it went to Clarries pay packet at Bridge farm. That might of course put strain on Pat Archer, but Pat is a benign employer. If, however, the employer was Brian Aldridge, the cold-hearted capitalist, he would be able to know at a glance exactly what Clarries income was, and to adjust her salary to take into consideration the money she would get from working families tax credit.

Jacqui Smith: I thank the hon. Gentleman for giving way to me, because I claimed in my maiden speech to be the Member for Ambridge. Does he accept that when the Government are successful in bringing in the working families tax credit, the Grundys will be better off on average by £17 a week? In addition, as he has said, Clarrie will have the option of receiving the credit herself because she works, meaning that the Grundys are a pair of workers, the group who, as my hon. Friend the Paymaster General said, represent a significant proportion of people on family credit.
However, in addition to all that, does the hon. Gentleman accept that for the first time Clarrie will be able to receive support for child care for her two boys? Will the hon. Gentleman tell the Grundys and other such families that the Conservative party would not support that change, and that he would repeal that type of support?

Mr. Pickles: I was beginning to think of asking the hon. Lady to give way to me. I have a feeling that the


hon. Lady, who claims to be the Member for Ambridge, will not believe what I say, and has no confidence in me. Let me give her the views of someone to whom she would listen: the President of the Council and Leader of the House of Commons, the right hon. Member for Derby, South (Mrs. Beckett), warned a Standing Committee on 18 March 1986—

Jacqui Smith: In 1986?

Mr. Pickles: The hon. Lady must pay attention to the good advice of her right hon. Friend. The Leader of the House then said:
Unfortunately, there are instances in which employers deliberately manipulate the system and withhold benefits to which employees are entitled … For the Government to propose putting the weight of payments that are an important part of family income on to a system which gives employers that freedom it is a substantial risk.—[0fficial Report, Standing Committee B, 18 March 1986; c. 943.]
I agree with that.

Lorna Fitzsimons: Will the hon. Gentleman give way?

Mr. Pickles: No, I am afraid the hon. Lady has not caught my eye.
Businesses will intrude into personal and family financial circumstances, to the detriment of privacy. The change will also place on business the heavy financial burden of administering the system. Large firms may have a payroll and personnel section, but the majority of people are employed by small firms that do not have such a facility. The owners of small firms will have to fill in the paperwork on the kitchen table after a hard days work.
The Institute of Directors has commented that that
could discourage companies from taking on low skilled or semiskilled employees.
When, in 1986, the current President of the Council and Leader of the House of Commons considered the problems of using employers to deliver family credit through the wage packet, she said:
It will be impossible for the DHSS to make the scheme work without the co-operation of employers and if employers, both large and small, are expressing their considerable anxiety, the Department will be running its neck into a noose.—[Official Report, Standing Committee B, 18 March 1986; c. 942.]
New Government, new neck, new Labour, same noose.
We must remember that the credit was not originally intended to be delivered in the way that is now intended. As recently as 16 June 1998, Mr. Martin Taylor, the author of many of the Governments proposals, told the Select Committee on the Treasury:
I think that it would be better from the employers point of view that the thing should run through the tax code which would allow the present cumulative principle to apply.
The Select Committee heard that officials had devised an N code to run a series of examples in which every case created distortion after some time.
So business must pick up the Governments ambition. The result: a heavy burden of administration and a reduction in job opportunities. For all the Governments intentions to the contrary, if a small firm is faced with two applicants, one in receipt of WFTC and one not,

it will plump for the one who is free from burden. How sadly ironic it is that the very measure meant to get people out of dependency will push them further into it.

Lorna Fitzsimons: Will the hon. Gentleman give way?

Mr. Pickles: No.
Experience from abroad shows that a system on which the working families tax credit is based has been more open to widespread abuse and has produced an increase in fraud. Canada introduced a similar scheme a few years ago, but is moving back to a benefits-based system. WFTC will offer huge bonuses for dishonesty and has the potential to pull employees into a web of dishonesty and corruption.
It seems that the lessons of Canada have not been learnt. In fact, they have not even been considered. We know that, because the Governments expert, Mr. Martin Taylor, told us so. In evidence to the Select Committee, Mr. Taylor said:
Canada is one of the few countries whose system I have not studied carefully.
In the United States of America, a similar tax credit, the earned income tax credit, was introduced, with the result that the Internal Revenue Service received claims of $4.4 billion more than the refunds that people were entitled to receive. To paraphrase the right hon. Member for Birkenhead (Mr. Field), the working families tax credit is fraught with great dangers. It offers high bonuses for dishonesty, strengthens the employers hold over people, pulls employers into a web of corruption and rewards employers paying low wages. I see that the right hon. Gentleman is in his place. I shall not develop his case further because he may want to catch your eye during the debate, Mr. Deputy Speaker.
It is worth looking at how social security and housing benefit fraud occurs. I had an opportunity a few weeks ago to talk to social security and housing benefit fraud investigation officers. I asked them about the kind of person who commits fraud. It was their view that there were people who went about defrauding the system cleverly and maliciously. It was their experience that some people would create separate identities and make multiple claims. But it was also their view that the vast majority of people simply drifted into fraud because the system allowed them to do so. They then found it impossible to crawl their way out, and ended up having to lie to cover up previous lies, thereby reinforcing the deceit.
This House has a duty to ensure that we do not set up a system that makes it easier for people to drift into deceit. A fundamental characteristic of the WFTC is that fraud is more likely.

Dawn Primarolo: Will the hon. Gentleman give way?

Mr. Pickles: No.
Throughout this speech, I have repeatedly referred to the Grundys. They have one distinct advantage. They are fictitious; they are played by professional and highly skilled actors. Thousands of families up and down the land are in similar circumstances, but will be made materially worse off by the Bill. [Interruption.] Their


personal and financial circumstances will be broadcast to their work mates. They will be seen as a burden by their employers—[Interruption.]

Mr. Deputy Speaker: Order. The hon. Member for Rochdale (Lorna Fitzsimons) cannot keep shouting across the Chamber.

Mr. Pickles: I am grateful for your protection, Mr. Deputy Speaker, although I hardly noticed the hon. Lady.
A measure designed to fight low wages and poverty will play a significant role in forcing people into further dependency. This Bill avoids addressing harsh realities. This Bill is without explanation; this Bill is without answers. Ultimately, this Bill will betray precisely the people whom it seeks to help.

Mr. Frank Field: I start by declaring a non-interest. I do not listen to The Archers. I know little about its characters, and I feel, after listening to the speech by the hon. Member for Brentwood and Ongar (Mr. Pickles), that that puts me at a severe disadvantage in debating the Second Reading of the Bill.
I congratulate my hon. Friend the Member for Bristol, South (Dawn Primarolo) on her promotion to the position of Paymaster General, and on the way in which she opened the debate. I thank her for the courtesy that she showed by meeting me to talk about the Bill. If her arguments did not fully persuade me, it was not because they were not applied effectively. I apologise for the fact that she has heard some of what I shall say this afternoon.
I wish to underscore what my hon. Friend the Paymaster General said when she said that the Bill needed to be seen as part of a total package that the Government are putting forward to try to re-emphasise the importance of work in our society. For we are not, as a Government, merely thinking about a working families tax credit; we are thinking of that together with a series of measures designed to ensure that, when people are available to work, they can work and are better off.
I have always supported the Chancellor of the Exchequer in his aim of reducing the starting rate of tax to 10p. I know that there are clever people in this world who say, You can spend the money more effectively on raising allowances and so on; that would be a far better way of helping people who are poor—but in 20 years of representing the constituents of Birkenhead, I have never met anyone who said that changes in tax allowances had played a part in convincing them to work. Constituents have constantly talked about what their rate of tax will be if they can work, or if they can work harder. The aim of reducing the starting rate of tax is therefore another part of the Governments strategy to try to ensure that people can move safely from benefit to work and be better off.
Similarly, the Government have a major programme in developing still further their welfare-to-work initiatives. That is part of ensuring that people make the transition from benefit to work. It is also important to emphasise that what the Secretary of State for Education is doing, in emphasising the Governments commitment to raise standards in school, is part of our welfare-to-work

programme. For the first time, it will be our aim that every child leaves school able to read and write. Some people listening in to the debate will say, What an extraordinary country it is that has to adopt that objective. Well, that is the world that we now live in, and which we want to change. That objective will have the important effect of shifting our society from a culture of over-dependence, in the sense that people have drawn benefit when that is unnecessary, to one that rightly emphasises the key place that work can, and should, play in most of our lives—at least for part of the time.
The Bill must be viewed alongside all those other measures. Its essential aim is to ensure that, when people do work, they will be better off than they are on benefit.
I emphasise that I am speaking in general support of this measure, but I—like you, Mr. Deputy Speaker—have been in the House for some time, and those of us who have been in the House for some time realise that the debate has almost come full circle. I was here when the present official Opposition were in government and introduced family credit. I rose from the Opposition Benches to express critical support for that measure, although the official line was one of condemnation, emphasising instead the importance of Scrooge employers and of taxpayers subsidising low-pay employers.
On balance, I did not agree with that line. I thought that there was significant advantage in a new scheme that would help people who were working, but I did not think that my colleagues in opposition at the time were entirely wrong to emphasise the dangers. I am glad to be speaking now from the Government Benches and I merely register the worries expressed by us in opposition. I did not think that they carried the debate then, and I do not think that they carry it now.
My two main worries about the Bill are, first, that some women might become more vulnerable as a result of the measure than they would otherwise be, and secondly, that there is a danger of fraud. It was entirely proper and understandable that, when they heard about the Governments new initiative, a large number of hon. Members on both sides of the House were concerned about who would receive the benefit. I suggest that although we should not dismiss that concern, it is no longer the main concern.
In opening our discussion today, my hon. Friend was right to emphasise that in many senses the Bill is a measure to help single parents and to ensure that they can successfully move from benefit to work, where they consider that desirable. However, many single parents in work are particularly vulnerable, given the nature of their employment and some of the employers they come up against.
In my surgery I have met single mothers who, because they have got on the wrong side of the employer or because the employer has tried to take advantage of them, sometimes sexually, have left their employment, and rightly so. Under the present system of family credit, they have done so knowing that their payments of family credit, often worth twice their wage packet, are safe in the post office or will be delivered to their bank account.
My worry about the proposed system is that it will strengthen the position of employers who abuse their positions. Not only will they behave badly about whether wages are to be paid, but they will have control over the immediate payment of the new working families tax credit.
I raised that point with my hon. Friend this morning, and I was much impressed by her determination to ensure that we have a system that can respond quickly and sensitively to mothers—and possibly the odd father—who find themselves in that position. I should add as a rider that I now know that there is all the difference between a Minister wanting something to happen and being committed to it, and what actually happens at grassroots level.

Dawn Primarolo: I am grateful to my right hon. Friend for giving way. This is an important point, which should be made clear to the House. In circumstances in which an employer did not pay or interrupted the payment of the tax credit, action would be taken. I explained to my right hon. Friend that a code of practice is currently being developed with the employers, and that there will be penalties against employers if they try such things.
More important, if the parent—the young woman in the scenario that my right hon. Friend described—tells the Inland Revenue what is happening, the Inland Revenue will move to ensure that she continues to receive her money, and will deal with the employer separately.

Mr. Field: I am extremely grateful to my hon. Friend for putting on the record what she kindly said to me this morning. All hon. Members will want the measure to operate as she describes, and when we have details of it, hon. Members will use their best intentions to make that machinery as effective as possible
I merely register the fact that I have been here too long not to know that we can express wishes in the Chamber, implement reforms and then find that they do not work out quite as we wanted them to. When they were in government, the Conservatives would make changes in housing benefit, everything would seem to be hunky-dory, and then they would come up against their constituents and all hell would break loose. I know that my hon. Friend is aware of the issues, especially given her past interests. She would, however, be aware of them in any event. We must watch the position very carefully.
There is concern about fraud. The hon. Member for Brentwood and Ongar kindly quoted what I had already said about that aspect of working families tax credit. I wish neither to withdraw nor to repeat my observations, but I am happy to agree that the hon. Gentleman reported me correctly.
Again, this is a question of power—power in the workplace. We sometimes encounter a bit of that when we come up for reselection, but generally we are in a privileged position. We are not, thank goodness, in the position of some of our constituents in the real world, who must sometimes deal with not very pleasant employers. It is clear from the work undertaken by fraud officers in the DSS on family credit that some employers want to strike a bargain with their employees, encouraging them to submit false returns in regard to their wages so that they can claim the maximum, which the employers then top up with cash in hand.
My hon. Friend mentioned steps that the Inland Revenue would take to counter the problem. I welcome those steps, but I should add that it is one thing to discuss such matters in a detached, almost clinical way in the Chamber, and another to know how the real world works, and to appreciate the pressure that some employers will put on decent people to connive at fraud. Certain people, of course, do not require any pressure.
This measure is based on experience in America, where fraud is generally accepted to account for about 15 per cent. of the American equivalent of working families tax credit. If the same happens here, we will face a fraud bill of £750 million. In Committee, we shall need to consider carefully how much more effectively the Treasury will protect taxpayers money than the DSS—sadly—has in the past.
I have serious reservations, but the Bill is part of the Governments overall strategy to move from what has been, for too many people, a welfare culture providing few chances, to a culture that offers real opportunities in the place of work. It would be entirely wrong for us to see the Bill in isolation from the introduction of a national minimum wage, and from the tax changes that the Chancellor has made and wishes to make in the future. It would also be wrong for us to see it in isolation from the Governments important welfare-to-work initiative, which they will develop further. I am happy to give qualified approval to the Bills Second Reading.

Mr. Steve Webb: It is a pleasure to follow the characteristically measured and constructive criticism expressed by the right hon. Member for Birkenhead (Mr. Field).
Let me explain at the outset the distinction between the Liberal Democrat and Conservative approaches. Both parties will vote against the Second Reading, but for rather different reasons. The Conservatives reasoned amendment says that one of the reasons why the official Opposition will vote against the Bill is the fact that it will increase the social security budget.
We welcome the additional £1.5 billion incorporated in the Bill, but that money could have been better spent. I was therefore disappointed when the Paymaster General chose to misrepresent our position, saying that we were opposed to supporting the low paid. On the contrary, we would spend that money more efficiently and in a more targeted way, and give extra help to the low paid.
All the desirable features of the tax credits scheme could have been introduced through reforms to family credit under the existing benefits system. The Bills unique, distinctive feature—indeed, almost the only thing in it—is that tax credits will be paid through the pay packet. That is also its fundamental flaw. There are four or five substantive reasons why payment through the pay packet is a mistake, most of all—and first of all—the effect on women.
On the radio this morning, the Paymaster General tried to present the measure as pro-women—I would argue that it could be anti-women. This morning, the Paymaster General briefed the press about the recipients of family credit; she knew that we would make a powerful case this afternoon and got her spin in first. She said that half the people on family credit are lone parents, so the purse-to-wallet issue is irrelevant. We agree. She also said that, of the remainder, up to 25 per cent. are couples in which the woman is the principal breadwinner, so if the tax credit goes through the pay packet the purse-to-wallet argument is irrelevant. We agree.
I am concerned about the 300,000 couples receiving family credit where the man is the principal breadwinner. I asked the Library to work out how much family credit is paid to the women in those households. The figure is


£900 million. The Government can have it one of two ways: either the money will predominantly be paid through the pay packet or it will not. If not, all this guff about the beneficial effects of paying it through the pay packet goes out of the window, because for lone parents it does not matter and the self-employed and women breadwinners are irrelevant. In respect of couples where the man is the principal breadwinner the response is, It will go to the woman anyway.
If the money is paid through the pay packet—as the Government want, and as they have set up a huge bureaucracy to achieve—women will have to negotiate with their partners to get back the £900 million that they currently receive.

Ms Keeble: Perhaps because there are not many women on the Liberal Democrat Benches, the hon. Gentleman has not been involved in the kind of discussion that Labour Members have had. Does he not accept—[Interruption.] This is a perfectly fair point. Does he not accept that the child care tax credit—which will pay for child care, either on invoices or receipts, and will go straight to the person giving the care—will make it possible for women, for the first time, to go out to work knowing that they can have quality, flexible child care? That will be greatly beneficial for women and is what makes the measure positive for women.

Mr. Webb: The hon. Lady points out the beneficial effects of subsidising child care. I would argue that there is a more effective way of achieving that, rather than having a child care tax credit that reaches beyond those on £30,000 a year. I accept what the hon. Member for Gravesham (Mr. Pond) said about £38,000 being an extreme figure, that five kids meant £150 a week and all the rest of it. Even so, stretching the figure to £30,000 a year is hardly targeting the low paid. That is not a sensible way to spend public money.
We should use the same money—not extra money—on cash subsidies for families with younger children and allow parents to choose whether they want to pay someone to look after their children or whether they want to do it themselves. The Government are obsessed with paying people to look after other peoples children; they do not give people a choice.

Mr. Pond: On the particular example of how well targeted the working families tax credit is, the hon. Gentleman will be aware of the work of the Institute for Fiscal Studies, which tells us, of course, that the greatest benefit will be obtained in those deciles in the lower part of income distribution. Surely that suggests that the measure is rather well targeted, certainly in comparison with other ways of spending the money.

Mr. Webb: As the hon. Gentleman will be aware, I am vaguely familiar with the work of the IFS. The point that I made to the Paymaster General was that, if the poorest 350,000 or so recipients of family credit continue their present working hours—I accept that, in an ideal world, we want them to work more—they will not get a penny out of the measure: the poorest family credit recipients will not get the money. The people who will get the money are those further up the income scale. I accept that

huge amounts will not go to people on £30,000 a year, but the benefit will be paid further up the income ladder than I would like.
If we follow the approach that I have described, where the additional cash goes to families with young children, including those on the minimum amount of family credit, that would focus help on the poorest family credit recipients, which I thought was the point.

Ms Keeble: Those are important points, but does the hon. Gentleman not accept that one of the reasons why we need to get women to go to work is that the economy needs some of their skills? As we know, there are certain sectors where we desperately need women: for example, nursing. Child care is a real barrier; it is wildly expensive. For all sorts of reasons, therefore, it is important to ensure that women have the option of going back to work, and flexible child care should be available if they work shifts, so that they can work and be sure that their children are being properly looked after.

Mr. Webb: The hon. Lady raises an important problem: the loss of womens human capital while they are out of the labour market and the loss of their valuable skills, which we do not want to lose. She says that it is important that they have flexible child care. If we follow my route of giving them cash through extra money for the under-fives, they can spend it on flexible child care which does not have to be registered, whereas the Bill allows only for registered child care, which is often not available for people such as nurses who work shifts.
The evidence on the incentive effects of the scheme—making people who are out of work move into work—is almost invisible. The hon. Member for Gravesham mentioned the Institute for Fiscal Studies. We understand from the Today programme that it has calculated that the incentive effect might lead to 40,000 extra families working.
I have no idea whether that is the right figure; nor do the Government. Here is a £5 billion scheme—the existing £3.5 billion and another £1.5 billion on top—and the incentive effects are simply not known; the Government do not have a clue.
We support that £1.5 billion because it helps poor people in a static situation. If it has a beneficial incentive effect, that is all well and good, but that is not the key point. The measure will benefit people who find it hard to get by but there is no evidence that it will have a big incentive effect.

Ms Margaret Moran: Will the hon. Gentleman not accept the view of the Child Poverty Action Group that the measure offers a well-targeted approach to dealing with those working families in poverty? It says:
Only 5 per cent. of Family Credit Claimants benefit from the current childcare disregard. The new childcare tax credit will help more families. It is more generous and is payable for children up to age 14.
It is targeted more closely on the poorest families, so it will benefit those families to a greater extent than family credit could ever do, with cash benefit in the way that the hon. Gentleman implies.

Mr. Webb: The hon. Lady might like to look at what the Chancellor of the Exchequer did in his first Budget.


He said, There is a £60 child care disregard in family credit. I am going to raise it to £100. I was sitting in the Chamber and I recall cheers from Labour Members. I tabled a question asking how many people would benefit from the change and the answer came back, 3,000.
The Chancellor has finally caught up with the point that we already knew: the child care disregard was indeed an ineffective way in which to support families and children; it did not work. The question is: is it better to have a child care tax credit that reaches people on £20,000, £25,000, £30,000 or more, and probably does not do much for people on very low wages because they cannot afford to pay for registered child care; or would it be better to pay the money in cash, through child credits on the tax credit, to families with younger children?
The Government must trust people. They must let them have the cash and decide what to do with it, rather than insist that they spend it in a particular way. Then those people can decide who brings up their children.
The effects on women are clear cut. The response of the Minister so far has been, Not to worry. If there is a problem about whether the woman will see the money, there is a choice, but the right hon. Member for Birkenhead has raised the important issue of relationships in which there is no equality—where there is an imbalance of power. One example is violence in families. If we were debating a different issue, Labour Members would be telling us time and again that violence in families is a huge problem and that tens of thousands or hundreds of thousands of women may suffer abuse or unequal power within a relationship. If there is a choice as to who gets the money, who will get it in those families? Will it go to the mother or to the father? We all know the answer. In those families, the money will go to the father.

Dawn Primarolo: Perhaps the hon. Gentleman would like to explain to the House the current arrangements for family credit. Although he touches on an important point about violent relationships, the family credit system does not deal with it either because the woman can be forced to sign the money away and, as he knows, it can be cashed by either partner.

Mr. Webb: Inevitably, there cannot be a perfect system that takes into account difficult family relationships, but the present presumption is that the money will go to the mother. That is better than a system that provides a balanced choice. My hunch is that the new system will be loaded to try to encourage payment through the pay packet. If it is not, what is the point of the Bill? The Bill has only one significant provision—payment through the pay packet.
Last night I was surfing the net—my nickname is Worldwide—and at 10 oclock I came across the Inland Revenue website. I discovered a memo from the Inland Revenue on the working families tax credit and disabled persons tax credit. I have seen Labour Members waving that document around. It comprises pages of riveting detail about the complexities of the new scheme. It does not just say that the money is to be paid to the carer, but raises a variety of issues.
Let me give the House one example of the absurdity of the regime that we are about to introduce. Let us suppose that someone is on strike. It is a shame that the

hon. Member for Bolsover (Mr. Skinner) is not here because we could be to referring to a striking mineworker who receives the tax credit through his pay packet. When he goes on strike, he no longer receives pay from his employer, so what happens to the tax credit? To get the tax credit, he has to get a form from his employer saying how much tax credit has been paid. He then sends the form to the Inland Revenue which pays him the money directly until the strike is over, when he sends the Revenue another form to enable the tax credit to be paid through his employer. How many people in such circumstances would be able to get a form from their employer? As there are not many mineworkers in my constituency, I am more concerned about the children who will be affected. Any interruption in the payment of tax credit—which would not occur under family credit—will create problems for the children concerned.

Dawn Primarolo: The hon. Gentleman touches on an important issue relating to certainty of delivery of the tax credit. He uses the example of a trade dispute. I hope that he has noticed that the code of practice and the procedures that are notified by the Inland Revenue state that the Inland Revenue must be informed. If an employer refuses to co-operate, the employee can tell the Inland Revenue and it will pursue the matter. As the hon. Gentleman knows, the Inland Revenue already has powers to demand and obtain information which it uses in respect of PAYE and national insurance contributions.

Mr. Webb: Does the Minister accept that any period without cash could cause problems for the children concerned? How long does she think it will be before it is clear that an employer is not co-operating? Let us suppose that a striking employee is paid once a month and approaches the payroll office towards the end of the month. The payroll people agree to provide a certificate but say, Were a bit busy at the moment. Maybe at the end of next week. Time goes by and the child goes without.

Dawn Primarolo: The hon. Gentleman will also know that the provisions state that an employer who fails to deliver to the employee as specified by the Inland Revenue would be in default and the Revenue would deal with the matter. The hon. Gentleman is trying to suggest that people will go without money, yet there are provisions to ensure that that does not happen.

Mr. Duncan Smith: rose—

Mr. Webb: The hon. Gentleman may wish to intervene.

Mr. Duncan Smith: I am grateful. The real point—which the Minister has totally missed—is that she assumes that all the people whom the hon. Member for Northavon (Mr. Webb) is describing are capable, clear thinking and not likely to be under any pressure from a difficult employer, particularly at a difficult time. That is quite the wrong assumption. The worst-off—the people who are under most pressure—will not be able to make those assumptions, and they will be scared.

Mr. Webb: There may be redress after the event, and it may be that—some weeks down the line—it gets sorted


out. However, the employee has to obtain a certificate and it may take him a week to find out that he cannot. He then complains, and there then must be an investigation. All of that takes time. None of it is necessary bureaucracy—the Government should simply pay the money to the principal carer and get on with it.
In terms of the effect on women, the Minister cannot have it both ways. Either the carers will claim it—in which case we do not need the whole edifice of bureaucracy—or the credit will be paid through the pay packet, in which case women will be deprived of £900 million, which they will have to try to ask for.
The second big problem is the effect on business. I have tabled written questions to find out whether the tax credit will be a burden on small firms. I have asked at what point does somebodys earnings become such that the tax credit to which he is entitled becomes greater than the income tax and national insurance that his employer has to pay to the Government.
A two-child family with one earner can be earning £200 a week—£10,000 a year—and have a net entitlement. In other words, a small employer who employs one person, who has two kids, on £10,000 a year will have to pay net money to the employee, and the Government will have to sub money through the firm. Now, £10,000 is not a particularly low figure, and I have tried to ascertain how many people are in that situation. That is a complex question—it depends on the number of children someone has, the earnings of the spouse and so forth.
I have found out how many people are working for smaller firms—firms with less than 25 employees; most of the firms will have very few employees—and earning less than £10,000 as a family. There are 200,000 couples with children in that position, and another 200,000 lone parents. If all of those people were the sole employees of firms, small businesses would have to pay them money and the Government would have to pay the small businesses money.
The Minister will say, Not to worry. All the firm has to do is to say to the Government that it thinks that it will have to pay some net money next month, and that it would like the cash up front. However, the firm may have to give at least three weeks notice, unless it pays on a weekly basis. What if the Inland Revenue is a touch bureaucratic? It is quite busy at this time of year. Might not it have other things on its mind?
Clearly, there will be cash ramifications for small firms. The small businesses of this land are not jumping up and down with joy at the prospect of administering the scheme. However, the Government do not know how many firms are in that position. I have asked them—the answer is not available. How can the Government introduce such a scheme without knowing what effect it will have?
The scheme will not just affect firms. What about people with complex circumstances? What about people who change their job? The Inland Revenue document says that if someone works for two employers, the person who pays that individual the most pays that person the tax credit—fine. If someone starts a second job, the tax credit is paid to that person while the system is being worked out. It is then paid to the employers, once the system is

up and running. If someone leaves one of the firms—which may be quite common for people with multiple employment—that person tells the Inland Revenue, and gets a form from the employer which gives the amount of tax credit. He sends that to Revenue, which pays him directly while the matter is sorted out. It tells the second employer that the employee has moved, and then that person starts getting the tax credit from that second employer. What is the point of all that bureaucracy? Why not just pay family credit? Why not just get on with it? What is this change achieving?
A worse example than changing jobs is changing family circumstances and relationship breakdowns. The tax people are not used to dealing with cohabiting couples—tax allowances are given to married couples. However, the benefits system is used to recognising cohabiting couples. Suppose a relationship—between a cohabiting or married couple—breaks down. What happens to the tax credit? Suppose the man is getting the credit through the pay packet. Does the woman who has moved out contact the Revenue and say, I have moved out with my child? Again, the woman could be leaving because of a violent relationship. If the Revenue contacts the firm to say that it should stop paying the tax credit, what is the first question that the small firm will ask? It will be, Why are we not paying you this tax credit any more? The answer might be, Well, the wifes left me.
The new system is much more intrusive than paying family credit to the carer, because in that case, if the wife leaves, the money goes with her and the children do not have to go without money for a week or two weeks. Under the new system, the wife has to apply to the Inland Revenue, at a very difficult time in her life; the Revenue has to send a letter to the employer; the employer has to tell the employee and perhaps ask embarrassing questions; and the employee may appeal to the Inland Revenue and say that his wife has not left him and is merely visiting her sister. That is all irrelevant, so why not stick with family credit?
Fraud is another problem with payment through the pay packet. The Paymaster General asked why the position was different with the new system. The obvious answer is that the money goes through the firms books and not directly to the recipient, so the firm has an incentive to declare payments lower than the real wages, make up the difference in cash and pocket the tax credit.
There is a provision in the Bill that says that, if people are unfairly dismissed because they are on tax credit, they can do something about it, but the right hon. Member for Birkenhead mentioned examples of the insidious pressure that people will be under. The Bill is a frauds charter. It has been said that one should design fraud out of benefit systems, but the new scheme designs it in.

Ms Karen Buck: Is not the hon. Gentleman aware that there is plenty of evidence that employers advertise jobs as suitable for claimants of family credit? The point that he is making is equally true of the existing system.

Mr. Webb: It is not true, because firms like people on family credit, as they can pay them low wages without the administrative burden of the tax credit. They will certainly not advertise for people on the tax credit. The question was asked how prospective employers,


when choosing between two candidates, would know whether one was entitled to the credit. In an informal conversation with job applicants, any shrewd employer will be able to ascertain whether they have kids; it will not be difficult.
The Bill is a missed opportunity to reform the in-work benefit system. Martin Taylor was asked to consider the integration of tax and benefits. His report said that he had not considered the tax credit in any detail because it was a given fact and he knew that the Government would introduce it. The task force was not asked to think the unthinkable or come up with a good scheme; it was told that there would definitely be a tax credit.
Instead of integrating tax and benefits, we could first have integrated in-work benefits one with another, integrated out-of-work benefits with in-work benefits and then, having done all that, thought about integrating a unified benefit system with the tax system. Instead, the Government went crashing ahead with the tax credit and said that housing benefit was too complicated to deal with. They said that that benefit was a nightmare and they would not touch it or do anything about mortgages; but the evidence is that the lack of help with mortgages for the low paid is one of the biggest genuine disincentives to work.
We have heard that there is not much evidence on incentives, but research by the Department of Social Security cited loss of help with housing costs on taking a job as one of the biggest barriers—much bigger than child care—to moving off income support. If the system had spent the same amount, focused on the lower-paid, with some help, for example, for people with mortgages, it would have done much more for incentives.
The child care subsidy reaches a long way up the income scale. People on the minimum wage of £3.60 an hour, working 30 hours a week, will pay income tax, but people on higher-rate tax will get child care subsidies. Has not the world gone wrong somewhere? Is not that a crazy system? Incentives are essential to the whole argument. Where is the evidence?

Yvette Cooper: I accept the point that the research is limited, but the most reliable research on work incentives has been carried out by David Card in the Canadian system. One group of lone parents was given extra help—a credit at a similar level to the working families tax credit—and another group was not. The group that was given the credit had an employment rate of 25 per cent., as opposed to 12 per cent. in the other group. Is not that pretty substantial evidence in favour of work incentives?

Mr. Webb: The hon. Lady is knowledgeable on those matters and will know that the Canadians scrapped the scheme—

Yvette Cooper: Not that one.

Mr. Webb: Well, I look forward to hearing the details.
As far as I know, the only empirical research done on this scheme—not the Canadian model, with its very different income distribution, family structure, employment patterns and all the rest—by my former colleagues at the Institute for Fiscal Studies, shows that it would have little effect. That is the only evidence that we have to go on.
The taper has come down from 70 per cent. to 55 per cent, which brings in people further up the income distribution scale. The Paymaster General says that that is good for incentives. What about the person who works overtime to make ends meet—as many families do—and who starts to receive working families tax credit? He or she will have more income for working the same number of hours. What would any hon. Member do if he or she were faced with working overtime, possibly to the detriment of family life, and then could suddenly get the same income by working fewer hours? Any person would give up on the overtime and cut the number of hours worked. That may well be a desirable outcome, but it is an example of one group of people who may cut their hours in response to the tax credit. In other words, lower tapers do not make people work more hours; they may make them work fewer.

Fiona Mactaggart: What surprises me most about the hon. Gentleman's argument is that, in the country that works the longest hours in Europe, he is suggesting that it is good to promote the idea of mothers and fathers working longer hours. That is a peculiar suggestion and I hope that he can reassure me that he is not saying that. Does he not think that it would be a benefit to have a system that reduces the incentive for people to work excessive hours, so that they can spend time with their children?

Mr. Webb: The hon. Lady knows that she is misrepresenting my argument grotesquely. I picked the example of overtime because those hours are discretionary and can be changed at fairly short notice. Other labour market choices will result from the changed tapers and they will mean people working less, particularly second earners. I suspect that the hon. Lady supports second earners and believes that married women, for example, should take paid employment given the opportunity. The measure may have beneficial effects for people who are unemployed, but it will be a disincentive for existing workers, in particular second earners, and I was not aware that it was Labour party policy to return to the traditional working family.

Mr. Bercow: Does the hon. Gentleman agree with the view expressed by the right hon. Member for Birkenhead (Mr. Field), if I remember rightly in August 1998, when he observed that the family tax credit venture could take the pressure off improving productivity and thereby the scope for increasing real wages?

Mr. Webb: My argument this afternoon has been that the £1.5 billion should be spent, but not in that way. We want to assist people who are in low-paid work by providing the floor of the minimum wage, which is where we differ. That floor would stop employers from depressing wages and a subsidy would enable people to stay in their jobs, perhaps helping with the mortgage or giving cash help towards child care. I am not particularly concerned about the hon. Gentleman's point.
Drawing my thoughts together, all the welcome aspects of the tax credits could have been achieved through family credit reform. Nothing in the Bill was necessary and nothing in it could not have been done through such a reform. We support the extra cash, but not to be spent in that way. Surely it is legitimate to point out that an


addition to Government spending could have been spent more effectively. That is not an unreasonable argument and it is not one that the Paymaster General should parody.
The measure has been introduced in a hurry, without considering housing benefit and the linkages—

Ms Moran: Will the hon. Gentleman give way?

Mr. Webb: No, I must conclude and give other hon. Members a change to speak.
The Bill will take money from women and put burdens on business. It will not cope with flexible families and the flexible labour market that we have today. There is a strong case for helping low-paid workers more, but the Bill is not the way to do it.

Lorna Fitzsimons: I was surprised at the opening remarks from both Front-Bench spokesmen for the main Opposition parties because I thought that the one thing they would acknowledge—the Liberal Democrat spokesman, in particular—was that it is better to make work pay if one is trying to help families and children in poverty. All the evidence shows that in-work benefits alleviate poverty. That must be endorsed in the first place.
Secondly, we must be encouraged by the Governments work on the tapers in implementing the working families tax credit. Every Select Committee report acknowledges that it is tapers that clobber people in much of the benefit system.
As for our guided tour of the Grundy family, I am glad that the hon. Member for Brentwood and Ongar (Mr. Pickles) listens to The Archers, because there was not much other substance to his speech. We did not learn whether his concern about the complexities of the child care tax credit stemmed from his wanting it to work or whether he acknowledged that the barrier—primarily for women but also for families—to accepting work is being able to find good-quality, affordable child care. Perhaps when the hon. Gentleman returns he will answer the question that he was not courteous enough to allow me to ask when I tried to intervene on him. Since the working families tax credit was first introduced by the Chancellor, the Government have spent a long time developing, through extensive consultation, a model that will advance the quality of life of working families.
Many have argued that the new credit will disfranchise women. There is a serious point about disparity of access to income in the home. However, given what has happened since we last discussed that, we should congratulate Ministers on how far they have gone to alleviate concern about the problem of moving income from the purse to the wallet. The Treasury teams work demonstrates the advantage of having more women Members. I congratulate the Treasury team on the fact that it includes a record number of women. The advantage of having so many women in the team is shown by the advance they have made in choice and in safeguarding the position of women in the transfer from family credit to the payment of working families tax credit.
I want to draw the Houses attention to several points that I hope will be elaborated on; my hon. Friend the Paymaster General touched on some of them. Much has

been made, certainly in the headlines, about the number of women involved. Most people who receive family credit are women because they are single parents. We are talking about a minority of people, who, without the diligent work of Ministers and officials, could have suffered from a transfer from the purse to the wallet.
Currently, in the small number of cases involved, if the form is not signed by the man, the woman cannot receive family credit no matter what she does. The work done on the working families tax credit means that the Inland Revenue will operate a three-stage approach. That will mean that there is a chance that women, if the information on the form can be verified, will be able to receive working families tax credit even without the male partners signature. Women who have problems in the home—domestic violence has been mentioned—will have a greater chance of accessing the money than they do now. If the form is not sent back to the Inland Revenue, it will be followed up with a phone call and, in some cases, a visit. That will mean a better chance of targeting help at poor women and children in difficult relationships than ever there was under family credit. I welcome that step forward to making work pay and alleviating the poverty of children and women. Along with the Governments historic increase in child benefit, it represents a dramatic change in the existences of people in poverty.
I have another point about choice. The form makes no presumption about gender; it talks of the applicant and the supporting applicant. As we transfer from family credit to working families tax credit, the form will go to the current recipient. So for the large part, the woman will be filling out the form. Even though she is not the main earner, she can choose to fill out the main applicants side of the form, which is similar to the family credit form. Even if the woman is not the person in work, she will be able to receive the working families tax credit. We are automatically putting the cards in the hands of women.
I beg to differ with the hon. Member for Northavon (Mr. Webb), who suggested that the position would be worse for women. There is a minute possibility that it could be and I do not underestimate that, but one cannot say that the same problems do not exist in the current benefits system—as they would in any system. I believe the hon. Gentleman acknowledged that.

Mr. Webb: I promise not to hog the hon. Ladys time—she would not let me anyway. The money will go through the pay packet either in lots of cases or in not very many. If it will do so in lots of cases, lots of women will lose money; if it will do so in not many, we do not need this whole edifice. Which is it—lots or not many?

Lorna Fitzsimons: You make great play of the internet, Mr. Worldwide Webb—I am glad you have such an interesting moniker. The Inland Revenue website, which is available in the Vote Office, gives all the details of how the scheme will be implemented. It says that there are three ways in which people can elect to have the money paid. One is by girocheque. The woman can choose. The money does not have to go through the pay packet, even if the woman is the earner. She can choose to have it paid a different way. That is laid out on the website and, as you have seen it, I am surprised that you did not refer to that fact—

Mr. Deputy Speaker: Order. I hesitate to interrupt the hon. Lady because I do not want her to think that I am telling her off all the time, but I have to tell her about the term you.

Lorna Fitzsimons: I am sorry, Mr. Deputy Speaker. I know that it is a terrible habit. It is just that I am getting into my stride and enjoying the debate. You will be aware, given that you have been a Member of Parliament for some time, that, of the 767,000 recipients of family credit in 1998, just over 300,000 women could possibly fit into these circumstances. It is known that a third of those already elect to put the money into a joint bank account or make some other similar arrangement. So we are talking about two thirds of those 300,000. I wish that we would put this matter in context. I am not trying to belittle the effect on those womens lives, but the reality is that we are not talking about the vast number of people currently in receipt of family credit.
The Government have tackled the problems that were set out when the working families tax credit was first debated on the Floor of the House. We must acknowledge that there has been vast movement since then to ensure that we go forward with the philosophy of making work pay while trying to protect women in vulnerable situations and provide choice.
The biggest barrier to work or choice is child care. Many women do not have the choice to work because they just cannot afford child care. The issue that I was clobbered with on the doorstep when I was canvassing before my election to this wonderful place was child care. People said that they could not afford to work. With the working families tax credit, and especially the child care element of it, literally hundreds of women whom I canvassed will be able to choose to work. That has to be a welcome move. Many of them are single mothers. Many of them trained before they became single parents and they want to use the investment that we made in them and they made in themselves. Now they will be able to.
Some hon. Members have said that child care tax credit is not referred to in the Bill. It is clearly referred to in the whole gamut of documentation on the working families tax credit. The child care tax credit is integral with the working families tax credit. The fact that the Government realise the reality of working families lives and the barriers to employment shows the sensitivity of our Government. I am proud to sit on the Government Benches as we make the advances which, sadly, have been lacking over the past 20 years. I found the comments of the hon. Member for Brentwood and Ongar laughable, because I doubt the sincerity of his concern about the complexities or otherwise of the child care tax credit.
People inside and outside the House have argued that the tax credit puts single-earner couples at a disadvantage compared with single parents. There are many commentators in the Chamber today who are more eminent than I am, but having examined the details, I can tell the House that, under the working families tax credit, the positions of a single-earner couple and a single parent will differ only if, in certain cases, their entitlement to child care tax credit is different because of their different child care needs.
The whole structure of the working families tax credit contains no intrinsic disbenefit to single-earner couples. It is important that we nail that lie and so prevent people

from claiming disingenuously that the WFTC is antifamily or pro-single parents. The measure is all about families, whether headed by single parents or by two parents. It is about making work pay for them and ensuring that their children are provided for.
We must bear in mind the anomaly whereby people on the sharpest end of poverty paid more tax. Under our proposals, people will earn more and keep more. In my constituency, the old work ethic persists: if people can get work, they will work as hard as they can; they are also prepared to work longer hours to earn a minimal additional sum, which, as my hon. Friend the Member for Slough (Fiona Mactaggart) pointed out, places additional stress on the family unit. After our proposals are implemented, those people will have a chance to make real choices about whether to stay at home, to listen to the children read and to help them with homework.
People have claimed that the Bill is not a family friendly measure, but I beg to differ: the Bill will give families choices that they have never had before. I support the Bill and hope to participate in its progress through Parliament.

Mr. Howard Flight: I am sure that many Labour Members sincerely believe that the new arrangements contained in the Bill will help the less well-off, reduce poverty traps and provide incentives to work. The main cause of our opposition to the Bill is that, as the hon. Member for Northavon (Mr. Webb) pointed out, it will be a disaster in practice.
Questions have been asked about problem cases, such as when someone is on strike or an employer is not behaving properly. We are told that people can go and complain to the Revenue and get the matter dealt with, but most companies Revenue offices are miles away, elsewhere in the country. How can we expect ordinary people to go to the extent of finding out where their companys Revenue office is, getting hold of someone there and raising their problem with that person? By the time all that has been done, people will be many weeks out of their money.
We have been assured that companies will not experience cash-flow strains and that there will be grants in the event of their paying out more than they are collecting. However, a company cannot get the grant until it knows what it is paying out. If cash-flow problems arise in a small company, weeks, if not months, will pass before agreement is reached with the Revenue and the grant is paid.
The Government have got themselves hooked on a concept that has been considered twice before in this country: in the early 1970s and in the 1980s. They are caught on the hook of thinking that the solutions and answers to our problems can be found in north America, where so many things are wonderful, without thinking through the nitty-gritty detail or conducting a proper case study into why, in Canada, a similar system went so wrong that it had to be scrapped. I have to say, with all due respect to the hon. Member for Rochdale (Lorna Fitzsimons), that it is shallow to believe that the proposals will solve all our problems without causing an administrative shambles.
My next point has been made light of, but I believe that it is not proper to come to the House with a Bill of this nature, from which the important provision of help with


child care is excluded. In addition, the measure will place an enormous burden on businesses: an assessment was promised, but it has not been delivered. It is constitutionally improper to have reached Second Reading of a Bill without that Bill being in anything close to its final shape.
No doubt, the Government hope that the Bill will be popular, but in principle, I believe that the Bill is both conceptually wrong and wrongly drafted. The Government will rue the day they went ahead with the legislation when, as has been pointed out, there was already a perfectly effective and straightforward system of family credit. Family credit could be made more generous and the system tweaked about, but it must be acknowledged that administratively, it has been one of the most successful welfare arrangements.
My first specific objection relates to the near future. When the Social Security Committee took evidence from various civil servants at the Inland Revenue, I discerned a high risk that, over the next 18 months, the implementation of the WFTC will be chaotic. I was not satisfied by answers saying that issues of implementation were being adequately addressed. I do not doubt that the Revenues staff have worked overtime and produced a detailed document, but it is most unlikely that the system will be up and running efficiently within 18 months of its being put into effect in the workplace and the massive change made from benefits distribution by the Benefits Agency to distribution via the employer or the Revenue.

Mr. Edward Leigh: While on the subject of the Social Security Committee, will my hon. Friend remind the House of the amendments that he tabled with me and our hon. Friend the Member for Bromsgrove (Miss Kirkbride)? He has come to the fourth of those amendments, which deals with the cost of administration, but will he stress that we also tried to persuade the Committee to accept an amendment stating our concern that:
this proposal will place the two couple household, one of whom works and one of whom looks after small children (the classic Beveridge family) in a disadvantaged position?
Will my hon. Friend refer to our amendments at some point in his speech?

Mr. Flight: I thank my hon. Friend for reminding me of that. I shall come to the point he raises later and hope to pick up all the issues that were raised in the Select Committee. In reviewing the Select Committee report, both The Times and The Independent picked up concerns about points of principle, as well as considerable practical concern about whether the measure would be workable, especially during the next 18 months.
The works of professionals and welfare gurus that I have read all make one point: that it is dangerous to split the provision of welfare. How can one easily achieve a single gateway if different benefits are dealt with in different ways? It is pure semantics and window dressing to argue that we are not debating how family credit is paid. The Bill commences:
family credit and disability working allowance to be known, respectively, as working families tax credit—
in other words, distribution is an issue.
The bogus arguments about stigma add little to the debate. What matters is how much people get; to what extent the tax credit will act as an incentive or a disincentive to work; and how efficiently it is administered. Over the next 18 months, hundreds of thousands of people will not get their family credit benefits through the system on time. There will be much debate and dispute, with companies asking the Revenue how much the amount should be. In addition, the tax credit cannot easily be coded into income tax. Many ordinary people who are in need will suffer.
On the question of stigma, views differ. Many hon. Members will not have worked for medium-size businesses, which are major employers in this country. As one who has done so, I can tell the House that in such companies, everybody knows everybody elses business—it is not like the House of Commons.

Mr. Oliver Heald: We know quite a lot here.

Mr. Flight: Yes, that may be true.
My point is that people will be curious about who is getting paid the credit, they will look it up on the net and they will find out. The proposals will make much more public than do the present arrangements those who are receiving family credit support. There is nothing to be gained in terms of reducing stigma and, potentially, there is much to be lost.
It is argued that the Bill will improve the problem of poverty traps and, at some levels, it may do so. However, hon. Members will know that between 469,000 and 1.2 million more people will now face marginal tax rates of 50 per cent., so disincentives may be alleviated in one part of the system, but even bigger ones will be placed elsewhere. As citizens advice bureaux and the hon. Member for Northavon have pointed out, unless mortgages and housing benefit are dealt with at the same time, there will still be major disincentives to work that the Bill does not address.
Being a little cynical and having spent 30 years working, I believe that there is a danger that the Bill will exert downward pressure on wages.

Yvette Cooper: Does the hon. Gentleman accept that that is a good argument for introducing a minimum wage to create a floor and prevent that downward pressure on wages?

Mr. Flight: That is one of the arguments for a minimum wage. The argument against is that it tends to price millions of people out of work. In Europe, 20 million people have been out of work because the minimum wage is too high. Let us hope that the Government have set the minimum wage so that Britain does not fall into that trap. Many employers are already well aware of the terms of family credit and are structuring pay policies to benefit from those. There will be an increasing element of the early 19th century Speenhamland legislation and deliberate subsidising of employment. If that does not constitute fraud, it will at least exert downward pressure on wages.
No one has mentioned this point, but I note that the Government have not changed the levels for disqualification, which begin at £3,000 of capital with


reductions in credit and go up to £8,000 of capital, at which point one would not qualify for any credit. I wonder how that squares with the Governments objective to persuade people to save more through the individual savings account scheme, which is intended to attract many more people who are not well off into saving. Those are self-defeating objectives.
On motivation, as the Government admitted, 470,000 more people will be dependent on welfare. The good side of that is that many of those people will be better off, but another half million people will have less incentive to work and be dragged into the problems of welfare dependency.
On expenditure, Conservative Members have made the macro-economic point that before the election, the Labour party argued that the overall social security bill would be reduced by better use of resources, which would enable there to be higher expenditure on education and health. Our major criticism is that the Government are contradicting that pledge because the bill is increasing enormously, partly due to these proposals. My additional worry is that the costs of the new arrangement could be astronomical. Instead of having a straightforward system, we may have one with substantial administrative costs. I wonder whether those have been taken into account in the estimate of the additional cost of £1.5 billion.
It has already been said that we will know the costs only when we know exactly what the proposals are, but the Institute for Fiscal Studies has suggested that if the arrangements for child care support are not tightly worded, they could add a further £4 billion. If they are tightly worded, they will not achieve the Governments aim. The proposals may, therefore, cost a further £5 billion and will not be particularly good value for money because much of that expenditure will be wasted.
As the right hon. Member for Birkenhead (Mr. Field) and others have said, the proposals contain too much that is designed to encourage fraud, including fraud by employers. That will be semi-fraud rather than wicked fraud. I am vaguely aware that many of my constituents live in a household consisting of two partners, which is structured so that it does not qualify as such and a single mother can therefore gain maximum benefits. That practice will be encouraged by the Bill because, as I shall demonstrate, there will be a major difference in what families receive, depending on whether their household consists of one or two adults.
As I have said, the Bill provides further disincentives to save. I do not understand how the Government think that they can achieve both of their objectives at once.

Miss Kirkbride: I am interested in my hon. Friends important point about savings, which I had not thought of despite being a member, as he is, of the Select Committee on Social Security. Will he make clear the Governments position on savings? What would happen if one gave children money to save?

Mr. Flight: I understand that the rules will not change from those that apply to family credit. Those who have £3,000 or more of capital receive a reduced amount of family credit according to a scale that goes up to £8,000 of capital, at which point they are entitled to no credit at all. I do not know how capital will be measured or whether equity in a house would be included. First,

I draw attention to the fact that that issue needs to be addressed. Secondly, it is inherently contradictory to seek to encourage more people to save and to have a major disincentive to save in these proposals and elsewhere.
The Bill is anti-family according to my sense of the word family. I brazenly take the view that a family normally consists of a mother and a father and their children, and that such a unit is best for bringing up children and enabling people to look after themselves in future. The proposals contain significant disincentives to form such units. As hon. Members have said, the main problem will arise from claiming the child care credit. A family of two parents and two children who earn £15,000 a year will receive only 25p of child care credit a week. A family of one parent and two children who qualify for the credit will receive £70.25 a week, which is a major disincentive to form a two-parent family.
Many hon. Members may have read an article by Martin Wolfe in the Financial Times earlier this year. He made the point that when one allows for the expenses of the husband or male partner, it is no longer worth having such a partner unless he earns almost £400 a week, which is the median level of pay in the country. Otherwise, he is a financial liability. The proposals will mean that more than 1 million people in two-earner couples will experience a fall in their returns from employment. That statistic was produced by the Treasury, not the Conservative party.
I remain of the view that children are best looked after by their mothers, particularly in their early years, if that is what their mothers want. Good habits and conditioning result, and childrens prospects of being good citizens are greatly increased, as all studies show. It is complete madness to provide an incentive that will virtually drive wives—particularly those in decent, ordinary families in the middle of the income bracket—out to work for fiscal reasons. [Interruption.] Labour Members may laugh, but that will happen. I know many women who are extremely upset by that because they want to spend time at home looking after their children at least up to the ages of five and six.
I certainly hope that the child-minder arrangements—when we know what the Dickens they are—will include some provision to help women who want to stay at home to bring up their children. Regardless of what the Government say, this Bill encourages and supports, through welfare and fiscal incentives, the single-parent existence. It also establishes fiscal disincentives for mothers to stay at home. Both provisions are anti-family, and go against the traditions honoured by the great majority of people in this country.
The Bill is also unfriendly to children. The argument about the purse versus the wallet misses the fundamental point, which is that mothers should have the automatic right to get the money from the post office. That cannot happen with a scheme administered through the employer. For all sorts of reasons, rows will be caused or the wife will give way: as a result, the changes will mean that it will be more difficult, rather than easier, to get the money to the children. In Canada, it was concluded that the most effective way to help children was through generosity and good old-fashioned child benefit, which could easily be collected from the post office by the mother and which did not involve lots of administrative complications.
It has already been noted that employers could experience cash-flow costs and be out of pocket until they received the covering grant from the Revenue—and we all know how long getting money from that source can take. The scheme will be very costly to administer. Some hon. Members may believe that it will require only an automatic coding from the Revenue and that the process will be done by computer, but there will be all sorts of exceptions. Employers will be in the front line and required to do the jobs of the benefit office and the Revenue. No compensation is being offered to companies, and many small firms will not be able to afford the costs involved. The proposal is an incentive to bad and crooked employers. Moreover, it is wrong for employers and work colleagues to know about private matters, such as the amount of family credit a person is entitled to receive.
I have given five examples of the way in which all the implications of the Bill have not been thought out. There will be major negative effects. A proper study of the Canadian model has not been carried out, and the Bill will lead to a colossal administrative shambles in the next 18 months. Thousands of constituents will complain in our surgeries about the shambles that is the working family tax credit system, as they do about the Child Support Agency. In many ways, the effect of the Bill will be perverse. It will make worse the very problems that the Government, and all hon. Members, want to solve.

Mr. Chris Pond: It is a pleasure to follow the hon. Member for Arundel and South Downs (Mr. Flight). He is a fellow member of the Select Committee on Social Security, albeit one with rather quaint views about the role of women in the home and in the workplace. I was also interested to hear that many bad and crooked employers exist who will exploit the system: I should have expected the Low Pay Unit, for which I used to work, to argue that case.
I am pleased that the hon. Member for Brentwood and Ongar (Mr. Pickles) is back in the Chamber. He made a moving opening presentation from the Dispatch Box about The Archers, and informed the House that the Grundys were a fictitious family. That may have been a revelation to the hon. Gentleman, but it was helpful for the rest of the House. If the Grundys are fictitious, so was much of the hon. Gentleman's speech.

Mr. Pickles: If the hon. Gentleman is going to patronise me, he will have to do better than that.

Mr. Pond: I shall certainly try to do better in that regard as I develop my speech. However, to bring the hon. Gentleman up to date, I should tell him that Walter and Grace have passed away.
The hon. Member for Brentwood and Ongar may have missed the point that the writers of The Archers were trying to make. The Grundys found themselves in a difficult position because, although on a low income, they tried to claim family credit—a system founded by the Conservative Government whom the hon. Gentleman supported. The Grundys found the system very complex, and we shall discover in future episodes whether, as a result, they end up as part of the 30 per cent. of families entitled to family credit who do not claim it.
In addition, the hon. Gentleman will know from the episodes that he has heard that Joe Grundy was not prepared to allow the family to claim family credit because, as he put it, he did not want them to go on the parish. That is a major point.

Mr. Nick Gibb: Will the hon. Gentleman give way?

Mr. Pond: I shall develop my arguments a little further, and then give way. It is important to note that family credit carries a stigma and is considered to be rather degrading. It also creates a poverty trap.

Mr. Pickles: The hon. Gentleman is the one who has missed the point. What Joe Grundy was saying was that he did not want everyone to know that he was on the parish. The problem with WFTC is that everyone will know when a family is on the parish.

Mr. Pond: I am rather pleased that I gave way on that point, as it will at least amuse the House. Employers are of course well aware of their employees circumstances and know when people receive family credit.
However, the hon. Member for Brentwood and Ongar has missed a more important point that renders inappropriate his reliance on The Archers as a vehicle for his opposition to this Bill. The great majority of low-income working families with children who will benefit from the working families tax credit bear little resemblance to the Grundys, and certainly not to Eddie and Joe. The real families involved want to do the best for their children: they are prepared to work hard but often their circumstances mean that it is difficult for them to do so.
During my years with the Low Pay Unit, before I became a Member of Parliament, I met many thousands of such people—hard working, wanting to take advantage of the available opportunities but too often, under the previous system, trapped in poverty and faced with the stigma of the means test. Is it not shameful that, under the previous Government, the largest single group among the poor comprised working families, in many of which the head of the household worked full time? The previous Government regarded those people not as the result of the failure of social policy, but as the instrument of economic policy.
Many of those people struggling to make ends meet also face the problem of the very high marginal tax rates built into the current system. The highest paid people in our society would never tolerate such rates, but those on the lowest incomes are expected to accept them as part of everyday life. I therefore welcome the Bills proposals. I am also a rather enthusiastic supporter of the national minimum wage, and I cannot accept the suggestion made by the hon. Member for Arundel and South Downs that it will cause millions of jobs to be lost. The evidence, both here and abroad, is that it will help to create employment.

Mr. Flight: Will the hon. Gentleman give way?

Mr. Pond: I will give way in a moment. The national minimum wage will ensure that people in employment have a decent income that will give them dignity.

Mr. Flight: With respect, my point was that, if the minimum wage is set too high, millions of people get


priced out of work. It is too high in continental Europe, where unemployment has reached 20 million. That is the risk. Secondly, I remarked that I hoped that the level had been set sufficiently low in this country not to cause that to happen.

Mr. Pond: I thank the hon. Gentleman for that intervention, but he should study the statistics. In the period during which this country pursued low-wage, sweatshop policies and reduced wages and employment rights to a level that would not have been acceptable elsewhere in Europe, proportionately fewer jobs were created here than in many other European countries. [HON. MEMBERS: Rubbish.] Conservative Members have bought the propaganda that this countrys sweatshop economy somehow created jobs. That was not the case, and I shall be happy to give them the details later.
In combination with the national minimum wage, the changes to national insurance contributions and the move towards a 10p starting rate for income tax, the Governments package of measures will mean that the lowest paid will for the first time in many years have the opportunity to have a decent basic level of income.
The working families tax credit will provide well-targeted assistance for those on low incomes. I recognise the expertise of the hon. Member for Northavon (Mr. Webb), but I believe that he is wrong on that matter. Virtually none of the benefits of the working families tax credit will go to those in the higher deciles of distribution, or even to the top 50 per cent. The credit will lift many working families out of the poverty trap, and it will lift the stigma associated with that.

Mr. Gibb: The hon. Gentleman talks about stigma, and about the 30 per cent. who do not claim family credit, a figure that I assume he has drawn from case loads. What does he expect the take-up rate to be of the working families tax credit on the basis of both case load and expenditure?

Mr. Pond: I cannot give a percentage.

Mr. Gibb: Higher or lower?

Mr. Pond: I believe that the take-up will be lower. [HoN. MEMBERS: Lower?] I correct myself: the take-up rate will be higher under working families tax credit because the stigma will be much less than it is under family credit. Any Conservative Member who doubts that should ask what is the take-up of tax allowances in general; take-up is very high because there is less stigma attached to allowances than to social security benefits. Working families tax credit is another form of tax allowance.
My right hon. Friend the Member for Birkenhead (Mr. Field) spoke of the importance of the proposed lop tax band. He talked of clever people who argue that the money would be better spent on increased allowances. The Institute for Fiscal Studies has argued that revenue can help the poorest most if it is spent as allowances. However, that is not so clever: the incentive effects of tax reductions are far more effective if acting on the marginal rate of tax than if given as tax allowances. Tax allowances are poorly targeted: they give most cash to the highest income groups, and no help to those at the very bottom

who pay no tax. The value of the working families tax credit is that it is one tax allowance that is effectively targeted at those on low incomes.

Mr. Bercow: We do not yet know how effective the working families tax credit will prove to be, but the hon. Gentleman's analogy with tax allowances is misguided. Does he agree that the point about allowances is that they are universal among those of the population who are in work? The new tax credit introduced by the Bill will not be universal. The same considerations simply do not apply.

Mr. Pond: The working families tax credit is not universal in the sense that it is intended to assist low-income working families with children, just as family credit is. My comparison was between family credit and the working families tax credit, which, because it is a form of tax allowance and associated with universal provision through the tax system, will have a higher take-up rate and less stigma.
Working families tax credit will provide a real incentive to make the transition into employment. The majority of people on low incomes desperately want to work, and I defy any Conservative Member to suggest otherwise. Under current arrangements, those people—and their children—pay a heavy price for making that transition and for pursuing the work ethic.
The Select Committee on Social Security examined proposals for the working families tax credit with some seriousness. The response of my right hon. Friend the Chancellor to our report was published earlier today. The Committee welcomed the attempt to provide greater help to low-paid working families, but it expressed concern about the purse-to-wallet issue, suggesting families should have the option of having the credit paid to either partner as a matter of choice. I am pleased that the Chancellor has made it clear—as did my hon. Friend the Paymaster General—that that choice will be available.
The Social Security Committee also recommended that free school meals should be extended to families who are awarded working families tax credit or the disabled persons tax credit. The Chancellor does not feel able to accept that proposal at present, but I hope that it will be further considered as the Bill goes through Standing Committee.
It has been suggested that working families tax credit may discriminate against single-earner couples. An amendment on that issue was rejected by the Social Security Committee, and it is clear that the only element of discrimination is the wholly justifiable matter of child care disregards.
The Bill represents the end of the Speenhamland system of family credit, and it will mean that working families receive a decent income with dignity.

Mr. Archy Kirkwood: It is a pleasure to follow the hon. Member for Gravesham (Mr. Pond), who is my hon. Friend on the Select Committee on Social Security. His expertise on this subject is a great advantage to the House.
I believe that the Government are trying to approach these matters holistically through a strategy composed of many elements, of which the Bill is one. Certainly,


the Bill makes more sense viewed in that context, but I wonder whether there is more to the tax credit philosophy than is contained in the Bill. If the Chancellor has gone to the trouble of making a measure so complex, I wonder whether he may not have it in mind to develop the philosophy in other directions.
I appreciate that the Chancellor wants to smash down hurdles between benefit and work; we all agree with that objective. However, if he sees tax credits as a philosophy to be introduced to other parts of the benefit regime, we must proceed slowly and carefully to ensure that we do not kill that objective by contriving a bureaucratic and administrative edifice with which to achieve it.
Changing the culture is important, and the Government are trying to do that through all their reforms. Perhaps a tax credit approach is better than a benefit approach. The Government may wish to comment later on whether providing money by tax credit routes is better than doing so by benefit routes. Those matters are important, but I should like to be confident that the Bill is the end of the story and that there is no more to that story. I do not mean it pejoratively when I hint at there being an ulterior motive, but if the Government are thinking about developing tax credits in the round as a future means of reforming the benefits system, it would be better for us all to know that now rather than coming at the matter piecemeal in future.
The Social Security Committee—I am lucky enough to chair it—has considered the WFTC for more than a year, completing three reports. The most recent reports are referred to in the Order Paper, and I hope that that has informed the House of the body of work on which people may draw for information. There have been signs during the debate that some have already done so. Our reports will come into their own in the Standing Committee.
I am pleased that my hon. Friend the Member for Northavon (Mr. Webb) spoke for much longer than I intend to take, and I hope that the Committee of Selection will take that into account when it decides which of us will sit on the Standing Committee: I understand how these things work, and I am keeping my fingers crossed.
I have two concerns that flow from what I have just said. The timing of the Bill is a little precipitate; I would have liked to take longer over the process. I perfectly understand that there is a political agenda and that the Government want to get the scheme up and running for the next election so that they can put it in the shop window, but I hope that, in trying to achieve everything as soon as possible—even by means of one phase in October and one next April—they are not being too ambitious.
The hon. Member for Gravesham mentioned that the Chancellors reply to our most recent Select Committee report was helpful. It suggests to me that some areas still need to be worked on and that consultation is proceeding. However, with the best will in the world, we may not have enough time properly to sort out the issues. My hon. Friend the Member for Northavon eloquently adverted to some of them.
The hon. Member for Brentwood and Ongar (Mr. Pickles) rightly said that there was some concern among Committee members—I felt it myself—that relying on affirmative or, indeed, negative procedure to

pass secondary legislation dealing with extra elements connected with the Bill is inadequate. The Committee adverted to the fact that the Procedure Committee has been considering so-called super-affirmative orders, which need the Houses special attention and could be amended. Nothing has happened to that recommendation. I should like to enlist the support of those on the Treasury Bench in trying to get the House authorities to look again at the matter.
I confess that I have changed my mind on the issue. Early in my career, when I was the social security spokesman for my party, I always argued that Departments should enshrine everything in primary legislation. The system is now so complicated that it is impossible to do so meaningfully, and there is a case for skeletal enabling Bills. To be fair to the House, even an affirmative, take-it-or-leave-it statutory instrument debate of an hour and a half, sometimes late at night, ending in a vote, is often inadequate. If the Departments involved can put pressure on the Modernisation Committee, the Leader of the House, and the Government Chief Whip, I would be encouraged. If the Government could say that such secondary legislation procedure will be given better consideration, I would have more confidence in this Bill turning out correctly.

Mr. Oliver Letwin: I have been listening to the hon. Gentleman's recent remarks with the greatest possible interest. Will be speculate on the possibility of pre-legislative scrutiny by his Select Committee of cases as complicated as the one we are debating? Would he favour that?

Mr. Kirkwood: In principle, I am in favour of more pre-legislative scrutiny. In three sections over the past year, the Select Committee produced a report. We took a birds eye view of all the evidence in the public domain, took evidence from interested parties, which took a long time, considered the commission headed by Martin Taylor that the Government set up following the pre-Budget statement, and produced a report on implementation of tax credits. I accept that that is not pre-legislative scrutiny, but it comes as close as possible to it in the circumstances.
I would not like to begin experiments with pre-legislative scrutiny on such a politically contentious Bill. We have a way to go before Select Committee procedures are adapted so that they may conduct pre-legislative scrutiny maturely. In principle, however, such a prospect would certainly have been interesting.
I should like to point to a few of the Select Committees recommendations, which I think are particularly important if we are to make the best of administrative difficulties. In order to try to smooth out peak demand, we recommended that
during the first three months of WFTC only, provision should be made for new awards of Family Credit to last seven months
—a full 30-week period—
so that, in future, work can be distributed more evenly throughout the year.
We visited the family credit unit in Preston, where some very fine work was being done. I was impressed, as were other Committee members, by the staffs commitment to make the proposed system work. They are confident that they can get through much of it. It was clear, from the nature of family credit, that there are two


big peaks in work load. If some steps can be taken to smooth out the incidence of work as it falls on staff, there would be a better chance of dealing with some tricky administrative problems. At no extra cost to the Government, that could be considered and resolved.
Secondly, administration costs of the scheme will impose a financial penalty on small employers if we are not careful. I understand what the Government have said. My hon. Friend the Member for Northavon was eloquent on this point. The Minister will know of reimbursement schemes in the statutory maternity pay system. I tabled a written question on the matter on 5 November. The system entitles small employers to an additional 7 per cent. of the payment of statutory maternity pay. Even if we restrict such a scheme to small employers, there is certainly a prima facie case for considering some reimbursement for the administrative costs that will inevitably fall on some small businesses, which are not able to consider such costs with equanimity. The Government should look to that.
Thirdly, the integrated benefit information system of providing better-off advice—IBIS—is not yet reliable enough. The Inland Revenue will have to do much work so that it may more expeditiously provide better-off calculations for people who are contemplating moving into work and off benefit. The Committee recommends
the provision of accessible points of contact in local areas where such advice is readily available.
That can and should be done. Indeed, it is in the Governments interests to do so in order that they maximise the benefit take-up.
If we change the tapers to take the benefit further up the income strata, we are likely to make more people eligible to tiny amounts of money. That is a disincentive to take-up. If people are eligible only for 50p or less than £1, they will say, What is the point of the hassle? The Minister must recognise that the Government might find low take-up rates because people will not be bothered to claim a few pennies.
Martin Taylor was very honest and open when giving evidence to the Select Committee. He spoke of the importance of culture changes, to which I have referred. He said:
the drivers in these cases are not purely financial.
He also said that, when it comes to the incentive effect,
we are dealing with intuition rather than any scientific proof.
For my money, I will watch this piece of legislation very carefully. I am prepared to be persuaded that it can be successful. It will be successful for me only if it succeeds in getting people off benefit and into work in big numbers. I would feel a little more comfortable if the Government had an idea of what measure of success they will apply. What test, what scales of justice, will they use to measure the effectiveness of the legislation? That important question will take time to resolve, but hon. Members on both sides of the House will be very interested in the answer.
A very important question lies behind the Grundy issue which has permeated the debate. Agricultural businesses find it very difficult to access family credit or any other means-tested benefit because of their income streams and the way in which their accounts are structured. The test period for income which determines eligibility to family credit is very difficult to ascertain. Mr. Grundy and many

of my farming constituents would be an awful lot happier and would sleep easier in their beds at night if specific measures, forms and application methods for agricultural workers enabled easier access to benefit.

Yvette Cooper: I welcome the opportunity to speak in the debate, because I believe that the working families tax credit embodies several important principles. It is not just about a small, detailed mechanism to change the workings of the tax and benefit system. There are principles at stake: first, about making the system fairer; secondly, about directing more support to children; and thirdly, about encouraging work. Yes, it would be possible to go further in pursuit of all three principles, and I believe that, in the long term, we should do so, but this is a right first step in that direction.
Interestingly, many technical and practical issues have been raised tonight—primarily by the Liberal Democrats—but the debate has also revealed deep differences of principle between the Government and the Opposition. I am astonished that the Conservatives so strongly oppose not only the Bill, but the additional £1.5 billion for low-income families. I qualify that by saying that I assume that that is still their position, because a U-turn seemed to be taking place at the Dispatch Box earlier this afternoon. [Interruption.] Perhaps the hon. Member for Brentwood and Ongar (Mr. Pickles) or the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) would like to qualify that. Unfortunately, they are obviously not prepared to state their exact position on that additional £1.5 billion. That seems to be the critical issue at stake.

Mr. Gibb: Does the hon. Lady accept that much of that £1.5 billion will be wasted because it is spread way up the income scale, to people on £28,000, £30,000 or £35,000—even people on 38,000? Does she accept that point?

Yvette Cooper: No, I do not accept that point. Undoubtedly, most of that additional money will go to low-income families in the bottom two deciles of the income distribution. A few families higher in the income scale will get additional money because they have child care costs. If a family on £38,000 have five children needing child care, good luck to them—they will probably need the help. However, there are very few of those families, and the real additional help is being concentrated in the pockets of low-income families.
It is interesting that the hon. Member for Bognor Regis and Littlehampton obviously objects to additional child care help for those families on £28,000. I shall return to that subject later.

Mr. Owen Paterson: Will the hon. Lady give way?

Yvette Cooper: I shall give way later; I want to make progress first.
A family in my constituency approached me about their financial situation, and I wrote to the Paymaster General about it. The couple are working more than 60 hours a week between them, and they told me that they reckoned


that they were about a tenner better off in work than they would have been on benefit. That is not fair, and it is not a good incentive for the couple to stay in those jobs.
I received the following answer from my hon. Friend the present Paymaster General. With the minimum wage, and with the working families tax credit combined with the child care tax credit—because the couple have one child in part-time child care—the familys existing income of £228 per week after tax will increase to £263 per week. That is an increase of £35 per week—a 15 per cent. increase. Effectively, the Conservative Opposition, by opposing the Bill and saying that they want to abolish that additional spending, are saying that they want a 15 per cent. increase in that familys tax bill. They want to present that family with a huge tax bombshell, instead of giving them the help which I think that they need.
It tells us a lot about the Conservative party that, throughout the passage of the Bill that became the Finance Act 1998, the Conservatives tried to block any closure of tax loopholes—which, effectively, are tax breaks for the rich—and yet they are determined to block tax breaks for low-income families.
The working families tax credit has two main functions—to support children and to support work. Measures to support children, increase their well-being and get them out of poverty have often acted as disincentives to work. Equally, measures to try to help people into work have penalised families and pushed them further into poverty. The important thing about the working families tax credit is that it targets both measures.
I believe that the help that the working families tax credit will give low-income families—especially children—to get them out of poverty should be sufficient reason to support the Bill, and to support the extra £1.5 billion that will go into that tax credit. Thirty-two per cent. of children grow up in poverty, in households on less than half the average income; that means less than about £185 a week for a couple with two children. However, childhood poverty is even more damaging.
We should take into account not only the number of children in poverty today, but the impact that that poverty will have throughout those childrens lives. Research by Paul Gregg and Steve Machin shows that the children of families who face financial difficulties are far more likely to leave school early, to end up in crime, to have contact with the police and to be less healthy throughout their lives. The legacy of that poverty will linger. We have an obligation to tackle poverty now, not only because of the situation today, but because of the inter-generational inequalities that will persist for decades. Therefore, raising the income of so many families by, on average, £17 per week makes a difference. It will improve childrens health, and adults health in 10 or 20 years time.
The second aim of the working families tax credit is to support work. That matters, partly because the greatest cause of poverty among children is unemployment among their parents. That gives us a strong reason to help parents into jobs—not only so that they can set a good example for their children, but so that they can bring more money into the household.
We have had a few contributions about the lack of evidence on work incentives, and whether raising peoples income by giving tax credits will make a difference to work incentives and encourage more people into work. I understand that the Institute for Fiscal Studies, in soon-to-be-published work—mentioned by the hon. Member for Northavon (Mr. Webb)—suggests that between 30,000 and 40,000 more women will be encouraged into the work force as a result of the working families tax credit. I believe that the IFS simply considered the impact on women, especially lone parents, but I understand that a success rate like that would have the added bonus of saving about 15 per cent. of the extra costs of implementing the working families tax credit.
However, that estimate is conservative compared with those that result from other academic work. I have not read that piece of research yet, but I understand that it has some econometric limitations, which would make it not as reliable—

Mr. Gibb: Perhaps I may help the hon. Lady. The IFS says that, on its estimates, only between 30,000 and 45,000 individuals will enter work as a result of the measure. It is costing £1.5 billion to put 45,000 people into work; that is £33,000 a job. Does she consider that that is taxpayers money well spent?

Yvette Cooper: I have argued from the start that this measure is primarily about helping children, but that it has the added bonus of creating work incentives. The IFS estimate is very conservative, so I do not accept those figures as they stand.

Mr. Webb: The hon. Lady has made a powerful case for spending the money, and for supporting children. I presume that the IFS model takes into account only lone parents, which is where the plus 40,000 figure comes from. I presume that the IFS has not considered woman second earners who are married. Does she accept that, almost certainly, the marginal effect of the tax credit on all those who are currently receiving it will be to reduce their work incentives?

Yvette Cooper: I do not know whether the IFS has included second earners. The hon. Gentleman is right to say that it would be easier not to. I believe that the impact on second earners is unclear because of the child care tax credit. There has never been any modelling of the impact of that type of child care tax credit, and that type of child care help—for which those second earners would be eligible if they went out to work. There is a complete lack of information on the subject.
I do not want to spend too much time on the IFS report, because I do not consider that it has made the most reliable estimate. The most reliable work, which I mentioned earlier, was done by a very well-thought-of economist called David Card, on an experiment in Canada. It was research not on the Canadian system, but on a specific experiment with lone parents. Half the group, assigned randomly, were entitled to a credit of a similar value to the working families tax credit; the rest were not. The two groups were compared to see what the impact on their employment would be. That is probably the most reliable economic assessment under current circumstances, compared with all the other studies that have been carried out.
It was found that the employment rate doubled among those eligible for the additional help. That represents a huge impact. Among the people who were not eligible for the extra help, the rate was 12 per cent. Among those who were eligible for the extra help, it was 25 per cent. That is a massive increase in the proportion choosing to go into work as a result of the measure. We should be pleased about that, but it is an added bonus. We should remember that the main purpose of the measure is to get money into low-income families and help to support children. The strength of the proposal is that it would achieve both objectives. It would not either help children or provide an incentive for work; it would do both—a double whammy, effectively, increasing the labour supply—

Mr. Pickles: I am grateful to the hon. Lady for giving way. She is making an interesting speech and my remarks are not meant to trip her up. She has been forthright about what would constitute a success. The figure of 40,000 clearly would not be—that is regarded as a conservative estimate. In a year or two, when the measure has had an opportunity to bed in, how many people would have to be brought back into the labour market in order for it to be regarded as a success?

Yvette Cooper: I do not think that we can specify a figure. The working families tax credit will be a success if it simply manages to get an extra £17 a week, on average, into the pockets of low-income families. I would regard that as a success, because it is so important to help the children living in poverty and the families who are struggling to support them.

Miss Kirkbride: Family credit does that.

Yvette Cooper: It is interesting that Conservative Members are calling from a sedentary position for those families to be given family credit. Will any of those hon. Members stand up and say that they want an extra £1.5 billion to be spent on that? There are two key elements to the measure. One is the extra money—the extra generosity—to help low-income families. The other is the change in the structure of the tax and benefit system to encourage people into work. Conservative Members clearly do not support that. None of them has stood up.
There is a further important element, if the proposal is to work, which has been touched on by other hon. Members. There is a fear that money will be given away and swallowed up by employers, because they will cut wages. Working families tax credit would not work without a minimum wage. I do not believe that family credit could ever be substantially extended or expanded without a minimum wage. How could people be convinced that taxpayers money would be spent efficiently, unless there were a floor on wages and on what employers could do in response to in-work benefits? Without a minimum wage, there would be no bottom line.
Opposition Members should be honest about their own arguments and their apparent concerns. They should recognise the strength of the case for introducing a minimum wage. That would allow in-work support, in the form of the working families tax credit, to act as a work incentive, to encourage more people into work and to get more money into the pockets of low-income families.
The Conservatives are trapped in a ludicrous ideological corner on the issue. Do they want the extra

£1.5 billion to be spent on working families? Their motion states that they will oppose the Bill
because it will increase the costs of social security … and … increase benefit dependency.
Cost seems to be a factor for them. They seem reluctant to spend the extra £1.5 billion—presumably, they want to cut it.
The hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) has said previously that the Conservatives would cut the working families tax credit. I did not understand the comments of the hon. Member for Brentwood and Ongar at the Dispatch Box. He seemed to be all over the place. Would he cut the £1.5 billion extra spending on the working families tax credit or not? A simple answer, yes or no, would help to clarify the position for the House and for my constituents, who want to know whether they will have to pay an extra £35 a week at the next election.
Those are important questions, but the Conservatives are prevaricating. They are not sure what they want to do about the £1.5 billion. The last we heard—

Mr. Pickles: The hon. Lady was no doubt present for the Prime Ministers speech to the parliamentary Labour party at Church house on 7 May 1997. When he said that he would reduce social security bills, did she heckle him?

Yvette Cooper: The aim of effective welfare reform is to cut the spending on the bills of failure, for which the Government that the hon. Gentleman supported were responsible for so long. It is tragic that they spent money keeping people trapped on benefit, rather than providing proper incentives to get those people into work.
The Conservatives do not know what they want to do about the £1.5 billion or the working families tax credit. Their leader said relatively recently that he wants to spend £5 billion on a transferable married couples tax allowance. Perhaps that proposal has now been quietly dropped and the £5 billion has disappeared, unexplained, along with the £1.5 billion.

Mr. Paterson: rose—

Mr. Bercow: rose—

Yvette Cooper: Alternatively, perhaps there has been another U-turn on the £5 billion transferable married couples tax allowance.

Mr. Bercow: I am sorry to trouble the hon. Lady. The speech made by her right hon. Friend the Prime Minister on 7 May 1997 was explicit. He said that there should be
far-reaching reforms that will tackle insecurity and poverty, as well as reducing social security bills.
Does the hon. Lady understand? There was no reference to the bills of economic and social failure. The Prime Minister called specifically for a reduction in social security bills. The Governments measure will increase those bills. Why did she not condemn and heckle him at the time, as she should have done?

Yvette Cooper: The hon. Gentleman is desperate to think of something to say, because his party has no answer to the question of what it would do about the Bill, and


whether £1.5 billion should be put into the hands of low-income families. I believe that that would be a worthwhile use of Government money.
Do Conservative Members think that the £5 billion transferable married couples tax allowance proposed by the Leader of the Opposition is a worthwhile use of money, when it would presumably put extra cash into the hands of Greg and Carla, the couple of strangers who married yesterday, having only just met? The people who would lose from the Opposition proposals are families who do not have enough income to keep going and to keep their children out of poverty.

Mr. Julian Brazier: The answer to the hon. Ladys original question is yes. I, like most Conservative Members, strongly support our leaders commitment to that policy. However, the hon. Lady is wrong about two of the details that she has given. The cost would not be as much as £5 billion, and she knows perfectly well that the couple to whom she referred would not be eligible for the allowance, as they are not supporting children or disabled relatives.

Yvette Cooper: In that case, what does the hon. Gentleman believe that the benefit would cost? Where would his party get the money, given that it already thinks that the Governments spending plans are reckless, according to the right hon. Member for Horsham (Mr. Maude), the Opposition Treasury spokesman?
The Conservative Opposition do not have a position on the working families tax credit, nor do they know what to do to tackle poverty or help families on low incomes. It is sad that they cannot come up with more intelligent alternatives.
However, the Liberal Democrats have come up with sensible points that are worth discussing in detail. Their main point is that they consider the measure to be inefficient. I disagree. The focus on efficiency stems from a view that the system must be pure and simple, and target one problem purely and efficiently. That is an academic economists approach. In fact, the Bill has two separate aims, and it is not possible to achieve both with complete efficiency. It is not possible to produce a perfectly efficient system helping to tackle child poverty, which also provides work incentives. The Bill will do both those things.
My hon. Friend the Member for Rochdale (Lorna Fitzsimons) advanced a credible argument about the benefits for women. We are not talking just about the huge benefits for women who are lone parents or main breadwinners; they will clearly benefit.

Mr. David Ruffley: The hon. Lady, whose remarks have been entertaining us, will know that the system that we are discussing will not allow a woman in a two-parent single-earner family to claim the child care allowance. A similar system in the United States led to family breakdowns and the non-declaration of couple relationships. What evidence has the hon. Lady to demonstrate that the American experience will not be duplicated here?

Yvette Cooper: The American and Canadian systems have been raised repeatedly throughout the debate, but I

think that, in many ways, they are not comparable to the system that we are proposing. Many of the problems inherent in both those systems have already been incorporated in the British arrangements for dealing with benefits and income tax.
The benefits for women that the Bill will provide will not only have a huge impact on womens incomes, but give them flexibility when they choose whether or not to work. Conservative Members are very foolish if they want to spend the next three years campaigning against help with child care for women who desperately want to work, and who want to be able to choose to work. The Bill will make a huge difference. It will not just help people in the short term, assisting them to find employment and secure a better future; it will tackle inter-generational problems. It will help those peoples children during the next 10 years, and the next 20 years.
That is why I think that working families tax credit is so important. I wish that the Conservatives would get their act together, and would realise what a benefit it will be for low-income families.

Mr. Julian Brazier: I shall not attempt to follow what was said by the hon. Member for Pontefract and Castleford (Yvette Cooper). I shall merely say that, although nearly every hon. Member would support the aims that she espouses, she seems to be seriously confused about how to achieve them. Perhaps the best example of her confusion was to be found in her closing remarks: she observed that we should not draw parallels with the American and Canadian experience only five minutes after stressing that the best work had been done in a Canadian experiment. What she said was entirely inconsistent.
I say in all humility, because I do not intend to make an especially party political speech, that as I listened to the Paymaster Generals opening speech my mind was taken back to a time in 1988, just after my election, when, listening to proposals for the sweeping changes that we made shortly afterwards, I was convinced. A small number of very intelligent voices were raised from the Back Benches on both sides, making criticisms that struck me as arcane in the extreme. I particularly remember the voice of Sir Brandon Rhys Williams on our side, and that of the right hon. Member for Birkenhead (Mr. Field) on the Labour side. Within two or three years, I had decided that what we had done in 1988 had been profoundly mistaken, and that the lone voices had been right.
I am sorry to say that I think that, far from reversing those mistakes, the Government are going down exactly the same path. They are making the same mistakes, while including far more people in them. I believe that the cost, in terms of both social misery and expense to the taxpayer, will be horrendous. The Paymaster General spoke of helping people into jobs, reforming the tax and benefits system and rewarding work; she referred to the problem that those in work can currently earn little more than those not in work, to ceilings on earnings through the various tapers and to increasing thresholds. Above all, several Labour Members have mentioned targeting. That is exactly the language that we heard 10 years ago.
I have five arguments against the measure. Several of them apply to earlier measures, but each one shows that the outcome of this Bill will be worse than the outcome


of the provisions that it will replace. Let me begin with the effect of pulling more people into the means-testing traps. The Government estimate that an extra 400,000 people will be involved, but I believe that the number will be much greater. 
We have heard the quibbling objection that the working families tax credit is a tax relief rather than a benefit. I personally support the idea of focusing on tax reliefs, not benefits. I strongly support the commitment of the Leader of the Opposition to a policy for which those of us in the Conservative family campaign have argued for a decade, favouring transferable tax allowances for families containing one earner supporting another who is caring either for children, or for an elderly or disabled relative. I also support child tax allowances.
The objection that was raised all those years ago to such universal allowances—an objection that is now being raised by Labour Members—does not focus enough on what matters. Ultimately, we all have the same objectives in this regard, although that does not apply to issues that I shall raise later. The problem is that, in attempting to focus on low earners, the Government are doing exactly what we tried to do in 1988, on a smaller scale: they are trying to push money towards people, and then withdraw it on a taper.
As a number of speakers—including the right hon. Member for Birkenhead—have observed, the catch is that the result will be a taper that is much higher than the going rate of income tax, which overlaps with a number of other tapers. Housing benefit is one of the most obvious examples. We heard a good deal of rhetoric earlier about people in work finding that they are earning little more as the taper goes up. That is exactly what will happen in this instance, but with a difference: more people will be involved and there will be more cost to the taxpayer.
That brings me to my second objection, which relates to complexity. There is a rather odd point here. Superficially, the proposed measure may appear simpler than the existing arrangements. The objection of the right hon. Member for Birkenhead, Sir Brandon Rhys Williams and others was based on the absurdity of a system under which people who were paying tax were also receiving means-tested benefits, which resulted not only in disincentives but in considerable cost.
It might be thought that the fact that both the tax and the working families tax credit will be handled by the same organisation would make the system simpler. Far from it. The problem comes when we hit the real world. I happen to have a couple of direct windows into these matters: my father owns and runs a small business, and my wife works part time for another. In the real world, fewer and fewer people earn the same each week. Not only does money go up and down because of overtime, it is heavily affected by bonuses, which are sometimes paid weeks or months in arrears.
For a short time, I worked for a business in which bonuses were calculated each week, but were paid a couple of weeks in arrears. As everyone knows—or should know—such arrangements have landed DSS offices with a complicated family credit problem. We are taking the administration away from a series of local offices that have learnt to cope with it and dumping it on to our small businesses. Few people believe in privatisation more strongly than I do, but this is a privatisation too far. Asking struggling small businesses

employing a handful of people to take on such an administrative nightmare—week after week after week—is too much.
That, I understand, is one of the major reasons why the Canadians, following a groundswell of public pressure, are abandoning their system after five years, which brings me to my third argument.

Mr. Ruffley: Fraud.

Mr. Brazier: Inevitably, my third argument is fraud, as my hon. Friend has guessed.
Hand in hand with the problems of complexity tend to go those of fraud, for exactly the reason that was so articulately discussed by my hon. Friend the Member for Arundel and South Downs (Mr. Flight). As he rightly said—and as the Social Security Committee, under the chairmanship of the right hon. Member for Birkenhead, said in the previous Parliament—most people who get involved in fraud do not deliberately aim to cheat the tax system or the benefits system. They become involved because they find the system too complicated. They are asked a lot of questions and would lose a lot of money if they answered honestly, so they get sucked further and further down the slippery slope.
The proposed system will prove even more complicated than the previous system, will involve an even larger number of people and will—incredibly and for the first time—bring employers into asking employees about their capital holdings. The scope for increased fraud and complexity is very much greater than under the old system.
That brings me to my fourth objection. All my hon. Friends who have spoken have said that the measure is an attack on the traditional family. I ask the House to think about that for a moment. There will be an impact on the traditional family. Whether mothers will be allowed to register as carers or not is a grey area. I fear that the answer will be no, although we do not know because that is dealt with in one of the Henry VIII clauses. If they are allowed to do so, the measure will become incredibly expensive. If they are not, here will be another Government policy that subsidises child care while doing nothing at all for low-income families in which one parent is caring for small children.
Most of us would accept that hon. Members on both sides of the House are trying to bring their own views and experiences to the debate but, of all the remarks that have been made, the one I most resented was made by the hon. Member for Gravesham (Mr. Pond). He intervened on my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) to challenge him about people earning £38,000 gaining from the measure, and asked how many families have five children.
Let me put on the record, because the hon. Gentleman is not in the Chamber, the story of a family with five children who visited my surgery on Saturday. Two of those children are by a previous marriage, and they were severely mistreated by the previous husband. The present husband, who does two extra jobs and works a seven-day week, is struggling to bring money in for his family, including the two daughters by the previous marriage. His income is at such a level that the difference that the measure will make to him can be measured in pence.
I wish that I could share with the House the resentment that my constituent feels about the people who are, as he sees it, sponging off the existing system. They will now receive considerable extra sums as a result of the measure. I do not know whether we can call the measure family friendly, because the word family seems to mean different things to different people, but it is deeply unfriendly to marriage.
My fifth and final point relates to cost. People talk as though the extra cost—£1.5 billion—is a relatively small sum, and Labour Members have suggested that we are being petty because we are concerned about the way in which the money is being spent. Of course we are concerned. The biggest single cost arising from the benefits system—the biggest single driver—is the cost arising from the dynamics of the system. Sir Brandon Rhys Williams was the first to make the distinction between the dynamic model and the static model for the benefits system, and the right hon. Member for Birkenhead and others have since run with that distinction.
There is a difference between a dynamic model—a system based on genuine incentives, not only to work, but for married couples to stay together and to raise children—and a static model focusing on existing need. I leave this thought with the House: the rhetoric with which the Paymaster General began the debate could have been lifted word for word from the announcement on benefit changes made by the Conservative Government in 1988.
The difference is—[Interruption.] Had the Paymaster General been present earlier in my speech, she would have heard me give six examples from the speech made from the Government Front Bench at that time. Whatever her commitment, and whatever she may claim, this measure is going in the same wrong direction as the 1988 measure, but embraces a much larger number of people.
The Paymaster General and a series of Back Benchers have embraced the measure enthusiastically, although the Canadians have had to abandon their system after five years. I say to new Members of the House that I bitterly regret supporting those measures in 1988. I believe that, within a year or two, they will come to regret supporting these measures.

Ms Sally Keeble: I am grateful for the opportunity to speak in a debate on what will be considered to be one of the Governments radical, reforming welfare measures. We have had an interesting and constructive debate. I disagree with many of the views expressed by Conservative Members. In particular, I do not agree with the conclusions reached by the hon. Member for Canterbury (Mr. Brazier), although I acknowledge a number of the pressures that he identified. We must address them, and I hope to deal with some in my speech.
I am not speaking as a great expert on social security, but I have drawn on the experiences of my constituents, who will be a touchstone for the measure, as they are for so many other Government policies. My constituents are by and large on relatively low incomes, although they

would not regard themselves as poor. Average incomes are between £15,600 and £16,400, so many of them will draw some benefits from the range of measures in the Bill.
Many women in my constituency work, although perhaps not full time, and their incomes are important in providing a reasonable life style for their families. They are very pro-family, and we need to make people absolutely sure that these policies are about supporting families and enabling people to give their families the kind of life style that they want, in the way that they want. I share my constituents views on that.
There are many family breakdowns in my constituency, because of the current pressures on families. Cases concerning families with five children from two different partnerships are common. Many of the women who come to my advice surgeries ask about the ways in which they can go back to work and reorganise their lives after the breakdown of their relationship with their partner.
I am sure that the Bill will be welcomed by my constituents, including families on low income, who want family earnings to be topped up in some way so that they can enjoy a better lifestyle. It will certainly be welcomed by single parents; I have already seen much evidence of that.
The Bill will be welcomed by other people who want the welfare state to be reformed. The point was picked up by my hon. Friend the Member for Pontefract and Castleford (Yvette Cooper). The Bill will be, and will be seen to be, an important measure to reform the welfare state, because one of the most important reforms that we can achieve is to get people off benefits and into work so that they can be financially independent. Many of my constituents would be prepared to pay quite a high start-up cost, because they know that, in the end, there will be a saving to them, and that the burden of taxes that they pay will be lower. I assure hon. Members that that issue comes up frequently on the doorstep.
The working families tax credit will—although perhaps not in itself, because there is the extra cost of the £1.5 billion—be an important way of breaking the cycle and getting people back into work: it will make work pay for many more people on low earnings. In doing that, it will ensure that more people, once they get off benefits and into work, stay in work and leave the revolving door that takes many people out of low pay on to benefits and back on to low pay. That will be a huge benefit for all concerned.
The working families tax credit will ensure that people feel that, when they go into work, they will not have to go through the social security system—a humiliating system to have to negotiate—to claim benefits and top up their pay packet. The Bill will end that stigma.
I understand the point about the need for confidentiality at work so that the employer does not go blabbing around the workplace about what different employees are getting from them and what they are getting from the welfare state. I understand that, because many of my male constituents have told me how aggrieved they are when their employers start chatting about who is paying what to the Child Support Agency. I am sure that that can be dealt with. The employer will not gain confidential information from the application form in the same way that, the minute a letter from the Child Support Agency comes winging through the employers letterbox, he finds out that one of his employees is in trouble with an ex-partner.
The Bill will be warmly welcomed because it is profoundly pro-women. That is important. We have looked at some of the figures. Half of family credit claimants—this has been mentioned often this evening—are single parents and almost all of those will be women. The working families tax credit deals in particular with some of the real barriers that have stopped women, especially single women with children, from going back to work, and it will encourage many more women to come off benefits and go into work.
I profoundly disagree with the people who say that the Bill moves money from the purse to the wallet. It will provide liberating benefits for many women because of the child care tax credit. For the first time, as far as I know—and I have two young children and have to pay an enormous amount in child care costs—a Government have recognised how much it costs to have children properly looked after, and have made some reasonable allowance for that, which women will recognise reflects the real costs of child care.
The Bill provides flexibility. That is important, too—particularly in my constituency, because many women in my constituency do shift work. They work at places that have 24-hour operations: call centres, retail places, packing and distribution companies and so on. They need to be able to get child care that operates at different times and can suit their working hours.
Let me pick up some of the points that hon. Members have made about whether parents can pay granny to look after a child. The Government are right to have certain restrictions on who can be paid child care costs. I confess that I have forgotten some of the details of the restrictions, but the Government are right to limit the measure to people who are properly qualified and registered, and to premises that are properly registered.
It is important that, if the Government pay money for something, they insist on quality. Given the panics and scares about low-quality child care and the fact that the Government, through the Department for Education and Employment, are trying to drive up child care standards, it is important that we insist on those same standards if money is being paid to someone to do the purchasing themselves. If we were paying the money to a local authority, we would insist that they buy to standard. If we pay to an individual person, the same rules have to apply.
Some ask, Why cannot an auntie be a child minder? If she goes through all the requirements that are needed to register and gets the premises inspected, I assume that she can be a child minder and operate as a child minder would, but it is right for the Government not to pretend that family care and professional child care are the same thing. There will always be a difference between people who decide that they want a family member to provide family care for their child and people who want to have a professional child minder, professional nursemaid or whoever to look after their child.
Anyone who has had to make arrangements for child care—the child might be looked after in a child minders place for a while, then picked up by a family relative or friend and taken elsewhere—knows that there are differences in the type of care that is provided. It is right to reflect those differences in the way in which we pay benefits to parents.

Mr. Flight: While I understand the logic of what the hon. Lady is saying, does she not feel that that is a

somewhat elitist view in that, in many communities, people are used to their children being looked after by the extended family and their neighbours, many of whom may be just as good at looking after children as a qualified professional? I fear that, if the measure is confined to qualified professionals, it will be satisfactory for graduate women who have careers, but it will not help people who are less well qualified and who are used to a different sort of child care.

Ms Keeble: I am grateful to the hon. Gentleman for giving me a bit of breathing space. Those are difficult issues, but, in many communities, particularly in new towns—and half my constituency is a new town, where many women work because, by and large, new towns grew up with that ethos—many people do not have extended families, so we are dealing with different communities. Some people may find that, with the hours they work, it is not convenient for a family member to look after their child.
The other factor—it comes back to the point that I made earlier—is that, by putting enough money into the child care tax credit, the Government are giving women a choice. The choice is not just a financial one; it is also about the type of care. It is important that women have that choice. I do not think that it is elitist to say that they can choose between an auntie and a child minder. The sort of money that the Government are putting into the scheme makes a child minder a realistic possibility and will probably mean that the child minder is paid more than the current rate, because some of the pay rates that child minders get are abysmal. One has only to work it out. Many women are paid under £4 an hour, so if they have to pay a child minder, the child minder will receive still less. The Government are doing the right thing in respect of the financial arrangements.
There are many issues concerning standards and quality and how much the state should intervene in family care—for example if an auntie looks after the children. I have spoken to women in my constituency who are deeply concerned about early-years care. They spend a great deal of time discussing the matter and, although they have not reached any firm conclusions, they definitely want a choice. Finance is a big barrier to choice, and the Bill addresses that.
Even if they have had jobs previously, many women returning to work have to accept very low pay. The working families tax credit recognises that problem and provides better tapering. Many women returning to work assume that they will receive benefit for a while, but are concerned that when their income increases they will disappear off the radar screen, lose their benefits and be back where they started. The improved tapering will therefore prove significant.
The Bill clearly puts an end to the link between single parenthood and welfare dependency. My right hon. Friend the Member for Birkenhead (Mr. Field), who made an interesting and stimulating speech, referred to that, and I agree with much of what he said. The Employment Service presented a roadshow in Northampton promoting to single parents the benefits of the new deal. It distributed leaflets about in-work benefits and had some early discussions about working families tax credit. Women were extremely interested in the information and have responded positively to all the measures. Women with partners in work pass on the information to friends who are single parents.
The working families tax credit will also benefit women who are second-income earners in families on low incomes who cannot afford child care costs.
I also welcome the disabled persons tax credit, which has not been discussed very much this evening. It will provide proper support for disabled people who work. In my constituency, a factory called Nordis Industries which makes soap and other products for major retailers has encountered problems with grants that were frozen by the previous Government—and I admit that the freeze was extended by the present Government. The disabled persons tax credit will help to restore the earnings of some employees at that factory. I very much welcome that.
My hon. Friend the Member for Pontefract and Castleford said that the Bill would help children. The main causes of child poverty include having a lone parent or a disabled parent.
The Bill includes some of the key principles of Labours proposals for welfare reform, and I welcome that. That is certainly one reason why the measure is popular in my constituency and elsewhere. The Tories turned the welfare state into a latter-day opium of the masses. It lulled people into accepting a completely unacceptable lot by giving them just enough money to get by, but not enough to do anything or to try and change their lives.
Much has been said about the Tories plans for the working families tax credit at the next election. One has only to look at their track record—particularly in respect of supporting single parents. Like many Labour Members, I saw employment training schemes for lone parents being shut down because of the lack of money, and whole generations of families in inner cities relying on the welfare state. I am pleased that the Government are determined to break that pattern so that the welfare state becomes a solution instead of being part of the problem. We shall make sure that the welfare state promotes the work ethic, supports families, encourages initiative, promotes social and financial mobility, supports aspirations and gives people a real opportunity to put their lives in order and provide for themselves and their families.
The Bill also integrates the tax and benefits system—a policy that could be taken further. Much has been made, particularly by the hon. Member for Northavon (Mr. Webb), of the fact that it does not include measures in respect of home ownership. I have two comments about that. First, my constituents who come to see me about problems with home ownership have mortgage difficulties because of their income levels. Many of those difficulties will be addressed in the Financial Services and Markets Bill, which will provide greater protection for home buyers and those with mortgages. Secondly, for many people on low incomes, the problems of home ownership involve not only mortgage repayments, but the capital costs of maintaining a property.
During the 1980s when the Conservatives were in government, the then Department of the Environment carried out a major study on the costs of inner-city home ownership; sadly, it was never published. It showed that home ownership was a financial burden on people on the lowest incomes. They could not afford to maintain their homes so the capital value of an important capital

asset would decline. Home ownership is much more complicated than the hon. Member for Northavon acknowledged.
The main principle of the working families tax credit recognises and removes the barriers to work. The Bill also has to be viewed in context. Many of those who have criticised the measure tonight have considered it in isolation, when it should be looked at in conjunction with the national minimum wage and the new deal programme, as a total package to get people into work, to make sure that work pays and to remove incentives to move out of work.
I believe that, in future, the working families tax credit will be seen as a great breakthrough for the welfare state. It will bring huge benefits to many families in my constituency who are on low or not very generous incomes. It will be a liberating force for many women and I am pleased to support it.

Mrs. Jacqui Lait: I begin by adding my welcome to the two hon. Ladies on the Government Front Bench. Let me say to the Paymaster General that I shall miss our annual bouts on smuggling and bootlegging tobacco and alcohol, but I welcome the Financial Secretary to a similar fate. Before moving on, I mildly observe that capable as both hon. Ladies and my hon. Friends on the Opposition Front Bench are, it is sad that the debate on a Bill that was advertised as crucial to the Government policy has not been graced by the presence of either the Chancellor of the Exchequer or the Secretary of State for Social Security. Their presence would have reinforced to the public that the Government take the issue seriously. The Opposition take it seriously, and we have had a wide-ranging and interesting debate. I agree with the points made by my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) and other hon. Friends who have spoken. Rather than reiterate them, there are a number of specific issues to which I wish to refer.
The right hon. Member for Birkenhead (Mr. Field) said that, primarily, the measure was designed to help lone parents. All of us know that under the heading of lone parents we lump together those who are widowed or divorced, and those who have never had a stable relationship.
My hon. Friend the Member for Canterbury (Mr. Brazier) and the hon. Member for Northampton, North (Ms Keeble) referred to the Child Support Agency. Given the complexity of the human relationships thrown up by the case work of the agency, I wonder whether we will have to deal with exactly the same sort of problems in relation to the working families tax credit in our surgeries. Mothers and fathers might argue about how many days they care for the child over the week, or, because one parent with care looks after the child for 240 days and the other for 110, about whether the benefits should be split between them. That would be an administrative nightmare—on top of the administrative nightmare that we are predicting. That may be a Committee point, but it would be useful to know whether the Government have even begun to think about it.
The Bill also aims to encourage two working parents, but it penalises one-earner couples. My concern is that low-income families with two or three children under the


age of five, and with a mother at home who is not working, will not get the child care tax allowance. I understand the theory that the mother should be looking after the children all the time. However, it has been apparent to many of us for many years that even when a mother is at home looking after children, those children can benefit from nursery school. Children in low-income, one-earner families will not be able to benefit from pre-school education, other than the rising fives.

Ms Buck: I am slightly confused by the hon. Ladys point. The provision of pre-school places, such as by the Pre-School Learning Alliance—those places are virtually free; there is a nominal charge—is widely available to parents. Such provision took something of a hammering under the previous Government as a result of the nursery vouchers scheme, but it is now witnessing a resurgence. There has been a significant expansion in places for three and four-year-olds in the state nursery sector. I am confused by the idea that there is no free or affordable child care for children under five.

Mrs. Lait: That is most interesting. On the one hand, the hon. Lady argues for not having a child care allowance for children under five because the care provision exists and is free. On the other, she is suggesting that one-earner, low-income couples should not be able to benefit from other forms of child care. The hon. Member for Northampton, North spent a lot of time saying that women need choice. That is what we should provide for them. The Government have not done so.
As a member of the Conservative party, I may not think that widespread and generous tax allowances are the best way to help people back into work, or to provide for children. However, we must get some logic into the scheme, and that is what is missing. I am not recommending one thing or the other. I am merely asking the Government to think about that exclusion of low-income, one-earner couples.

Ms Keeble: Does the hon. Lady accept that a couple with a child, with the woman at home, will shortly have the choice—if the child is over three—of putting the child into a nursery? However, the other option of a child minder would not normally be taken, because a child minder normally provides child care at home—which, if the mother is staying at home, she would do herself. The choices offered by the Government are perfectly realistic in both cases.

Mrs. Lait: I am very glad to hear that, and I hope that that proves to be true in practice. I would imagine that a mother with three children under the age of five—and one over the age of three—will still have the problem of getting the other two properly ready for school. That is the result of pre-school education. We must make sure that the Government have thought this through properly.
I accept that this is a tax credit and not a benefit, but there is an increased dependency on state provision because of the terms of the credit. The Government have said that they want to get away from the dependency culture. The Conservatives have long wanted to do that, but the working families tax credit increases the number of people who are dependent on the state.
In the long run, those people who are not dependent on the state will find that they become resentful of the number of people for whom they are paying through

their taxes. We must remember that this is not Government money—it is taxpayers money, which comes from companies and individuals to pay for other people. Eventually, if the burden becomes too great, we could have a taxpayers revolt, as in the late 1970s.
The hon. Member for Northampton, North dwelt at great length on the issue of child minders—another point that may well come up in Committee. At present, there is confusion as to who can be a child minder. In the Social Security Select Committee, it became clear that the Inland Revenue believes that it is possible for relatives or friends to become registered child minders. I do not have a problem with that, and I suspect that we shall see a growth in the number of registered child minders. However, there is a gap in the provision of care for children between the ages of eight and 14.
If both parents are at work and there are no after-school clubs, we will have latchkey kids, and all of the problems that go with that. Will the Government amend the Children Act 1989, so that registered child minding can go up to the age of 14, or 16 if the child has a disability? Are the Government going to insist that every child between the ages of eight and 14 is looked after in something like a kids club? What would happen if the child did not want to go to such a club?
My mother was widowed when I was 12, and I used to come home to a house where sometimes there was somebody there, and sometimes not. I must say that I preferred it when no one was there—that suited me down to the ground. That was the choice of a child and, under the provisions of the Children Act, we must give children choices.
I wish to ask about au pairs, because au pairs are being hit badly by the national minimum wage rules and regulations. The Government are saying that au pairs are employees and are not there on an educational basis. Under the terms of the working families tax credit taper, some couples who employ au pairs may be eligible for the working families tax credit and child care allowance. The au pair currently does not necessarily get paid the national minimum wage and is not a registered child minder, but could well be the person providing child care for eight to 14-year-olds.
If we increase the number of registered child minders, local authorities will incur registration and inspection costs. If we ask employers to take on the burden of distributing the working families tax credit—leaving aside the question of who will know what—there will be increased costs for the public sector, which employs nurses, teachers and others. What provision have the Government made to ensure that the public sector does not have to try desperately to find the funds to administer the system?
We need some answers. We have had a very wide debate, and I have added some more aspects to it. I hope that the Government will have considered all the issues by the time that the Bill goes to Committee. The questions need to be teased out and answered, otherwise the chaos that I am sure will attend the birth of the credit will be worsened.

Ms Karen Buck: I warmly welcome the introduction of the working families tax credit, which I see as an integral part of the


strategy to make work pay. It is the third leg of the stool of the minimum wage and welfare to work. I am pleased that it has also been warmly endorsed by organisations with a wealth of experience and knowledge of issues concerning poverty and low pay.
The National Association of Citizens Advice Bureaux, which daily deals with thousands of people who are trying to calculate whether they would be better off going back to work, has welcomed the proposals. It said that the
introduction of the Tax Credits will mean considerably greater resources being directed to boosting the earnings of groups in low paid work.
The Child Poverty Action Group said:
In conjunction with the minimum wage, the working families tax credit will make a substantial difference to families in low paid work.
Those organisations have not hesitated—and, I am sure, will not hesitate—to criticise the Government if they feel that resources are not being directed in the best possible way to assist people on low incomes.
I apologise for the fact that I was out of the Chamber for an hour and missed some of the contributions, but I was more than a little disappointed with what I heard from some Opposition Members. I was especially disappointed at the lack of willingness to recognise the additional incentive that will be introduced by making payments through the wage packet.
That incentive has been casually dismissed by many, although the hon. Members for Canterbury (Mr. Brazier) and for Beckenham (Mrs. Lait) recognised that the proposal offers a tax credit and not a means-tested benefit. That is what distinguishes it from the family credit system, and there is a profound psychological difference. There is a real prospect of people being able to supplement their incomes without having to go into the social security system. That is the central raison detre of the Bill.
It is absolutely impossible to estimate what the impact will be, but common sense dictates—and we know from speaking to people in our surgeries and elsewhere—that people do not like going into the means-tested social security system if that can be avoided. In particular, they want to be able to work without having to do that.
Opposition Members asked why we should not simply build on the family credit system, ignoring the fact that that system is by no means perfect, not only for the reasons that I have outlined but because family credit is taken up by only 76 per cent. of those who are eligible, although about four fifths of the money available is claimed. The system cannot be held up as unimprovable.
Opposition Members made something of a meal of the. wallet-purse issue. It is to the Governments great credit that they listened to the strong arguments of various organisations, including the ones that I mentioned earlier, and of members of the Social Security Committee, who considered the proposal in great detail. The Government listened to the initial concern, that the working families tax credit would automatically go into the pocket of the earner, and choice has been introduced into the system. The large majority of claimants of family credit, who are likely to claim the working families tax credit, will be unaffected by the proposal.

Mr. Pickles: I am grateful to the hon. Lady for giving way and, especially, for her questioning in the

Select Committee, which was useful on this point. If there is a dispute between partners as to who should get the money, who ultimately should decide?

Ms Buck: Personally, as in the Select Committee, I favour the default option. As far as I remember—I may be proved wrong—Opposition Members on the Select Committee accused Labour Members of making heavy weather of the proposal, effectively saying that we were accusing men of being difficult and playing down the fact that, in the majority of families, it is perfectly possible to come to an amicable agreement over the division of resources; but in fact we pressed for and achieved a significant recognition of the wallet-purse issue. I, along with the Child Poverty Action Group, which dealt with the matter in the briefing that it published in response to the working families tax credit, am largely reassured that the issue will not be a great problem, although I do not consider the system absolutely perfect.

Mr. Webb: The hon. Lady stressed the psychological benefits of payment through the pay packet and said that means-tested benefits carry a stigma. Why, then, would any woman in a couple choose the means-tested option?

Ms Buck: Families on low incomes may make the decision that it helps them with budgeting; others may not feel that they need to organise their budgets in that way. It is perfectly possible for people to opt for either method, and we are giving them a choice.
In my remaining remarks I will deal with the operation of the child care tax credit, which is the flagship of working families tax credit. It has been said that child care costs are the single most significant barrier to single parents entering the workplace and I agree. Although having said that, housing costs are probably running a pretty close second in London and it is important that the Government deal with housing benefit later.
A large number of single parents live in my constituency and I have made it a priority to talk to parents in nurseries and play groups and to their representative organisations. There is no question that child care costs are the principal barrier. Women and single parents want to get back into the workplace. First and foremost, they want to do so through education and training so that they get not so much a job as a career. The availability and cost of child care is the most significant barrier that they face.
The child care tax proposals set out by the Government exceeded my wildest expectations. They are very generous and an innovative, and radical response to that most serious barrier to work. The child care tax credit will replace the child care disregard within family credit, which was paid to only 40,000 families throughout Britain—it took a rocket scientist to understand that system and two rocket scientists to explain how it operated. The Chancellor was right to give it a short-term boost in the first few months of this Government as an indicator of our support in dealing with child care, but we have rightly and properly moved swiftly on after only 19 months in government to replace it as part of the review of tax credits.
Child care costs vary dramatically throughout the country, but in London it is not uncommon for child minders to cost £120 a week and for nursery places to


cost £170. I do not begrudge child minders a single penny—a child minder is the principal source of my child care—because they are grossly underpaid for the demanding job that we expect of them. However the costs, particularly in London and the south-east, make child care a pipe dream for the overwhelming majority of parents.
Another aspect of the Bill that is pleasing—and here I am picking up on some of the comments of the hon. Member for Beckenham—is that the operation of the child care tax credit will deal with another significant worry, which is the quality of child care. Much child care is undertaken not merely by mums and grandmums—thank God it is, and wonderful it is too—but in other wider and more informal networks of friends. To all intents and purposes those people are doing the job of child minding, but they are doing it without the benefits of registration and inspection, or of being connected into the education and social services networks that provide support mechanisms, drop-in facilities, education, and the national voluntary qualification in child care, which helps to lever up standards.
I hope and expect the child care tax credit to encourage a significant proportion of unregistered child minders to register. That will be good news all round. It will raise the income of women who are unregistered child minders, which is a good thing, and encourage registration, also a good thing. The hon. Member for Beckenham mentioned the pressure on local authorities because of the additional costs that might accrue from such registration. That is a reasonable argument and it deserves to be tackled. However, the chronic shortage of registered child minders is one of the most serious problems facing local authorities. Those with statutory child care responsibilities need a supply of child minders to help them with the daytime care of children who are being assisted under the Children Act 1989. It is a chronic problem and it leads to additional costs. The Bill will also help local authorities out of that bind.
I envisage the money that will be made available through the child care tax credit—I am evangelising with this message in my local community—being used not only to encourage women to register, but to provide the opportunity for them to come together to organise child minder support groups and drop-in facilities, which are woefully inadequate. Child minding is an isolating job at times and people need support. I also envisage the resources that will become available to groups of parents being used to help to finance after-school facilities and homework clubs.
The Government have made a welcome commitment to the extension of after-school clubs through the sixth good cause of the lottery. Evidence of that is now all around us. However, that will not be enough, for example in isolated rural communities where, under present circumstances, it will be impossible for every village primary school to have an after-school club. The measure will provide an opportunity for parents to band together.
The Royal Borough of Kensington and Chelsea, which is not known for its radical support of Government initiatives on such matters, is holding fire on its nursery proposals in the expectation that opportunities will arise out of the implementation of the working families tax credit, which will allow it to revamp and restructure its nursery and after-school facilities. That is a welcome development indeed.
There is an opportunity for a virtuous circle here and for the £200 million or so—I am greedy for more of a good thing, but I will take it for what it is at the moment—to start to cascade down to some of our poor communities and estates.

Mr. Gibb: The Institute for Fiscal Studies states that if many more people register as child minders, which is what the hon. Lady says that she wants to happen, the £200 million could escalate to £1 billion, £2 billion or even up to £4 billion. Does she accept that figure?

Ms Buck: I do not. The figure is based on the assumption that everyone who provides any sort of child care will register, which is fanciful. That will not happen, primarily because there is no reason why relatives who care for their children and grandchildren should be brought into the scheme. It is most unlikely that that will be the case.

Mr. Gibb: The hon. Lady said that she wanted more informal child minders to register. Those registrations would not have been taken into account by the Government when they calculated the £200 million cost. Therefore, she must envisage that her hopes are that the scheme will cost significantly more than that. How much does she envisage her hopes costing the Government?

Ms Buck: As I am sure the hon. Gentleman knows, there is a paucity of information on both current provision and the likely demand for child care. Therefore, it is fanciful to put a figure on it. Again, it is to the Governments credit that the Department for Education and Employment has made money available to local authorities so that they can carry out the first serious audit of child care requirements. The £200 million is a significant increase on the family credit child care disregard, which was payable to 40,000 families—I cannot remember the exact figure for that. The increase is certainly welcome and it will create huge additional opportunities.
Two other issues are worthy of attention and flow from the report of the Social Security Select Committee. First, and in this instance I share the opinions of the hon. Member for Beckenham, the application of the child care tax credit must continually be reviewed to find out to whom it applies. I share with my hon. Friend the Member for Northampton, North (Ms Keeble) the belief that one cannot use the child care tax credit to pay for unregistered child care. It would be wholly inappropriate for public money to be spent to support child care if there were no guarantee as to the quality, the basic soundness of the premises and so forth and to safety. I have not the slightest doubt that the moment that something unfortunate happened to a child in care that was partly paid for through the working families tax credit we would all pay dearly for it. Clearly, registration must be the bedrock. The reliance on after-school clubs, child minders and other categories of care currently registered under the Children Act 1989 does not necessarily reflect the realities of todays labour market.
My hon. Friend the Member for Northampton, North talked about her constituency experience of the sort of jobs that are becoming available. I can echo that from my experience of the inner city. The jobs that are becoming available, especially to younger women entering the job


market, are not amenable to the nine-to-three or nine-to-five working day. That is not always a bad thing because it can fit parental preferences. I am talking about service-driven, 24-hour jobs such as those with the Heathrow express coming up at Paddington, call centres, supermarkets and The Gap in Covent Garden. It is not reasonable to make the child care tax credit available only for care provided outside the home.
Even if child care is available and the parent desperately wants to take a good job, the option will collapse if the only care available means that the parent has to ferry a seven-year-old about at 9 pm. No parent wants to do that. Similarly, people do not want to have to shuffle children from a homework club—perhaps in another school—to a child minder and then to some other care. The Government must revisit the idea of making the child care tax credit available for care in a persons home. There is no easy solution, but I hope that the Government will give godspeed to the private Members Bill on registration of nannies and consider the matter when that becomes law.
The second issue, which is dear to my heart, that I draw to the Ministers attention from the Social Security Committees report is free school dinners. The National Association of Citizens Advice Bureaux report on the working families tax credit noted that most people entering work have unrealistic expectations of how much better off they will be. In a citizens advice bureau or benefits office, they get a better calculation and we start to break through the problem. When people consider applying for a job or look at adverts or the job centre, they do calculations in their heads that do not work out. I am supported by several organisations that deal with such issues in saying that free school dinners are central to the problem. A parent with two children in a school finds that the bill can add up to £11 or £12 a week. It is a real barrier.
In practice, once people are in work they are likely to be significantly better off and to start to increase their earnings, so school dinners become less significant. The Social Security Committee recommended that free school dinners should at least be rolled over for the period of the initial claim for working families tax credit. It comes back to psychology, which is not to be underestimated. Such a provision would provide a cushion of security for claimants whom we want to enter the workplace because of the advantages of self-esteem and earning potential that it will give them but who are put off by a barrier in their heads.
Many important points were addressed by the Social Security Committee in our three reports over nearly two years. The Government have listened and responded to many of them. Other concerns were raised tonight. I do not accept all of them but many are serious, specific issues that concern the implementation of the tax credit. However, the key fact is that, taken with the minimum wage and the welfare-to-work package, this is a comprehensive, well thought out, radical proposal to make work pay. For the first time, we are showing people who are in very low paid work or considering entering the workplace that we have a comprehensive strategy to be on their side, to help them and to exchange benefit dependence for the dignity of work.

Miss Anne McIntosh: I congratulate the hon. Member for Regents Park and Kensington, North (Ms Buck) on her excellent speech. I apologise for not being in my place for the whole of it, but I had a meeting with the Minister for Local Government and Housing to discuss the standing spending assessment grant for North Yorkshire.
I congratulate my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) on his excellent speech moving the Opposition amendment. I especially agree with the part that refers to the Bill leading to increased business costs while undermining family structures. It would be ungracious of me not to congratulate the Financial Secretary on her well-deserved promotion. I trust that we have not lost the hard bargain that we struck on the Agenda 2000 deal for North Yorkshire; I hope that her successor will hold to it. I congratulate the Paymaster General in her absence. There will soon be only ladies at the Treasury; we shall watch this space.
I have problems with the tax credit scheme, which is bad for business and a poor deal for electors, contrary to what many Labour Members said. It is particularly bad news for the traditional family unit as we know it. Its effect on business will be negative, even though we heard that the proposals may be revised following the thorough Social Security Committee report, which I welcome.
The tax credit is negative in approach and will be difficult to administer. Small businesses in particular will be burdened by extra administration. The Confederation of British Industry is on record as firmly believing that all employees should have the option to receive credits directly from the Inland Revenue. Speaking up for employees, I think that flexibility for them is important. Many single parents may wish to continue to receive payment through the Inland Revenue for reasons of confidentiality. In that respect, I pay tribute to the contribution of my hon. Friend the Member for Arundel and South Downs (Mr. Flight).
Continued payment through the Inland Revenue would avoid the perception of being on benefits, which carries a particularly negative social connotation. It would also cover temporary workers and employees with more than one employer. I shall return to that momentarily. I think that the Government have closed down that option. Perhaps the Financial Secretary will surprise me by saying that they are minded to reopen it. I make a personal plea to her to consider allowing employees to continue the option of being paid directly from the Inland Revenue and not, as the Government propose, through their employer in their pay cheques.
The administration of the working families tax credit will hit small firms especially hard. A huge raft of extra administration is involved, and small firms will inevitably suffer from the cash-flow problems mentioned earlier. I understand that the Government may not have considered the point that in the vast majority of cases, the amount of credit will exceed the tax liability of the claimant. Will they will give that some thought, because that it will impose a heavy administrative burden on employers?
The Paymaster General has said that the Inland Revenue intends to put employers in funds when requested. I still argue that the administrative burden on


smaller employers of paying credit up front and having to claim funds from the Inland Revenue in advance will be a significant burden that many cannot meet. It is not fair to ask small firms to meet that extra responsibility. Will the Financial Secretary consider exempting smaller firms from the requirement to administer the credit through the pay packet? Perhaps employees of very small companies should have their benefit administered by the Revenue. I wonder whether the Financial Secretary can satisfy me that the Government have not yet considered such an exemption, but may be minded to agree to it now that I have given them the opportunity to consider it this evening.
I mentioned low-paid workers in multiple employment. Individuals may have several employers paying their salary. Which employer will be asked to pay the credit and whose decision will it be? I have not so far heard an answer to that question. It is not a hypothetical question; it is a concrete question.
The Government have paid lip service to helping small businesses and reducing the administrative burden on them. I appreciate that the Government look to small businesses, as the previous Government did, to create jobs. Small businesses are perhaps the most positive generators of new jobs, so this is the most extraordinary time for the Government to introduce an extremely complex working families tax credit scheme, which will clobber small businesses and put an unacceptable burden on them.
I argue that the Government intend to use employers as unpaid tax collectors and will inevitably impose an even greater burden on small businesses. Perhaps we can pause for a moment and consider the already lengthy list of statutory schemes imposed on businesses. Income tax, national insurance contributions and VAT, and benefits such as statutory sick pay, maternity pay, paternity pay—I am not sure whether that has been introduced yet—and redundancy pay have to be funded by employers. The Financial Secretary can imagine the impact on small businesses of adding to that impressive and growing list the working families tax credit, especially on small and sole-employer businesses. It is an unacceptable burden to ask them to take on at this time.
I would go further and say that the scheme gives entirely the wrong message to the business community. The Government are asking it to create jobs and to act as an unpaid tax collector. I echo the comments made by my hon. Friends in saying that it would be more appropriate to leave the administration of support for families with the Government, as it is now through the Department of Social Security, and not, via the back door, to use the good offices of already hard-pressed employers.
The relationship between an employer and an employee is extremely finely balanced. If the working families tax credit is introduced in the way that we have heard this evening, employers may even be accused of invading the personal and private life of an employee—not by their choice, but because they are required to do so by statute. As we heard from my hon. Friend the Member for Arundel and South Downs, fellow employees may be able to link into the computer system and find out not only what other employees earn, but what tax credits they receive. Employees may be offended and the employer could be placed in an embarrassing situation. The scheme could also lead to ill feeling on the part of an employee should an administrative error occur. The complicated

nature of the tax credit and the manner in which the Government expect the employer to administer it on behalf of the Government mean that the potential for administrative error, in my humble judgment, is huge.
The Paymaster General said that there was a choice to be made by the Government and, by implication, by the Opposition, between being business friendly and being family friendly. I put it to the House that the Government have failed on both counts. It comes as a great sadness to me that the Government have wasted an opportunity in the Bill. It is neither family friendly nor business friendly. For the reasons that I have given, it is positively unfriendly and unhelpful to business.

Mr. Desmond Swayne: My hon. Friend has been eloquent in examining the Bills unfriendliness to business. Is she satisfied at the prospect that the Bill will impose a means-tested benefit, with all the corrosive effects that that may have, on people earning incomes up to £37,000? Is she satisfied that the Bill is fair to two-parent families with only one earner?

Miss McIntosh: My hon. Friend can obviously read my mind. I was coming to the specific question of two-parent families with a single earner. As for means-testing up to £37,000, I have a hazy recollection of figures in the early morning—or not so early morning as the Paymaster General said—interview on the Today programme this morning. The Paymaster General did not refute the figures. If my memory is correct, in a study undertaken by Alan Duncan of the Institute for Fiscal Studies, it was said that not many jobs would be created by the tax credit scheme. On the institutes calculation, the cost of each job would be a staggering £40,000.
I was left with the impression that £40,000 would be the cost of each job and that not many jobs would be created. I was mildly surprised that the Paymaster General let that allegation go past without refuting it. Perhaps, like me, the Financial Secretary is having some difficulty finding that figure. I have read through the press release and the revised press release from the Institute for Fiscal Studies, and the evidence that it gave to the Select Committee, and I have to confess that I did not find that figure. However, that allegation was made this morning and was not refuted. That amount is an unacceptable cost to the taxpayer for no saving.
The hon. Member for Pontefract and Castleford (Yvette Cooper) alleged to my hon. Friend the Member for Brentwood and Ongar that the Conservatives were not in favour of increasing the bill by £1.5 billion. I had the impression that the Government were elected on the basis of a commitment to cut social security spending. I put it no higher than that I am left confused. Perhaps the Financial Secretary could answer that point. How a £1.5 billion increase in one measure can be interpreted as a cut leaves me in a state of confusion.
As my hon. Friend the Member for New Forest, West (Mr. Swayne) says, the Bill is not family friendly: the tax credit would penalise two-parent, single-earner families because, unlike lone parents, such families do not qualify for the child care tax credit. That is positive discrimination against two-parent, single-earner families and I wonder whether it was a deliberate omission on the part of the Government to exclude the nuclear family, in which one parent goes out to work while the other stays at home and takes responsibility for bringing up the next generation.
The Bill is unfriendly to the traditional family, which I was brought up to cherish and which, I understand, the Prime Minister and his family also cherish; and it is unfriendly to small businesses. The Second Reading of the Bill is a real tragedy for the traditional family. It demonstrates the Governments unwillingness to support the structure of families, many of whose members are employed or employ others in small businesses.

Mr. Paterson: My hon. Friend has touched on a point that brings together both of her arguments. In America, many new businesses—small businesses, employing fewer than five people—have been created by families. The Bill, by imposing time-consuming extra regulation on hard-pressed entrepreneurs, will hit both families and businesses in this country.

Miss McIntosh: I shall have to ask my hon. Friend to help me with my next speech. He has provided a positive argument which does indeed neatly bring together my two arguments. In North Yorkshire, 95 per cent. of businesses employ fewer than 25 employees, so any business employing more than that number qualifies as a large business in that area. The point is that the Governments tax credit policy will hit 95 per cent. of the businesses in North Yorkshire. I thank my hon. Friend for helping me with that argument. The Bill is a bad one and I shall vigorously oppose it on Second Reading.

Ms Beverley Hughes: We have had a wide-ranging debate and many hon. Members on both sides of the House have made their points ably, from differing points of view. However, as this is a Second Reading debate and because many of the points made so far have dealt with hon. Members views on the detailed implementation of the Bill, I intend to return to the starting point and to the principles that the Bill is designed to address.
My hon. Friend the Member for Pontefract and Castleford (Yvette Cooper) spoke eloquently about a serious problem that has persisted in this country for some time: the problem of children living in poverty. Children of low-income families suffer the long-term and multiple effects of relative social and economic deprivation. That has knock-on effects on their health, housing, aspirations and achievement. My hon. Friend made it clear that, if we are to address those fundamental problems and achieve a sustainable improvement in the condition of those families, we have to introduce radical measures. I agree, and that is my starting point.
The current welfare system as it relates to work and tax does not help families to improve their lot. Our income support systems trap such families in a culture of dependency. Our family credit and tax systems keep people earning low wages, because punitive tax rates and tapers ensure that they have to take a giant step in terms of additional income if they are substantially to improve their lot. It is important that we develop a radical approach to such problems and so crack the cycle of deprivation.
The only sustainable approach is to direct additional resources to the heart of those families and, simultaneously, to help them to establish a sustainable

position in work over a long period. Those twin approaches are essential if we are to enable such families to achieve a sustainable improvement, with all the benefits in future years that such an improvement carries with it. The working families tax credit embodies those twin approaches and makes possible, albeit not inevitable, a sustainable improvement in the lot of some of the poorest people in our society.
We need a proposal that is based on certain principles and embodies certain characteristics. First, it needs to contain a minimum income guarantee which will give families the certainty that their income will not drop below a certain level as a result of the legislation.
Secondly—I have heard various views expressed on this point—we need also to link assistance with employment; in other words, to link the measure with the rewards that people get from work. We have discussed income a great deal, but it is not only income, important though that is, that people receive from work. Being in work changes peoples life styles and aspirations and the way they feel about themselves. It enables them to develop an approach to life that emphasises moving forward and having routines and disciplines. All that has an impact not only on parents in work, but on their children.

Mr. Swayne: I entirely agree with the hon. Lady, but does she accept that concern about the Bill, certainly among Conservative Members, relates not so much to a minimum income guarantee, but to the fact that a means-tested benefit will be available to more families, up to and including those who are relatively well to do, which can only have a corrosive effect on society?

Ms Hughes: No, I do not share the hon. Gentleman's view. The mechanism for the delivery of the benefit as a tax credit rather than the current welfare benefit—which is separate from the wage packet and the world of work—will make a crucial difference to the way in which people perceive it. The stigma that many people feel is attached to receiving benefits will be significantly reduced, if not eradicated. That is an important element of the proposal.
The attempt in the Bill to inculcate a psychological change was one of the features that Martin Taylor specifically referred to when he reported on proposals to introduce a tax credit. He thought that it was important to have a tax credit system because
it would associate the payment in the recipients mind with the fact of working, a potentially valuable psychological change.
Hon. Members have commented on the relative paucity of research on the direct relationship between the psychological effect of a change in delivery of a benefit and an incentive to work, and I acknowledge that paucity. We are dealing with the unknown, but I suggest, particularly to Conservative Members, that it is common sense that a benefit that is firmly attached to the rewards of work is much more likely to provide an incentive to work by making work more rewarding than it is to have a neutral effect or to act as a disincentive.
Thirdly, we need a system that is more generous to families at the low end of the income scale than at present. We need an arrangement that enables them to keep more of their pay.
Fourthly, as my hon. Friend the Member for Regents Park and Kensington, North (Ms Buck) clearly pointed out, we certainly need a much more generous .and


effective measure for child care assistance than the child care disregard on family credit, which is particularly ineffective.
Fifthly, we need to give help to those already in work, but we need also to make work more worth while for those families who want to work. We need a child-centred approach which provides assistance directly to the heart of the family. Delivering help through the wage package does that.

Mr. Swayne: I thank the hon. Lady for showing me her customary courtesy in giving way a second time. Does she accept that the advantage to which she refers will be confined to single-parent families, and that the fact that the same help with child care costs will not be available to two-parent families in which only one parent works will at least give an impression of setting those families at a disadvantage?

Ms Hughes: I have listened carefully to the argument advanced by Conservative Members that the Bill goes against the traditional idea of the family. I have been bemused by it because, as far as I can assess from the detailed documents that I have read, the notion that the Bill will penalise families in which one parent stays at home to care for children is false. The Bill will be neutral in that respect.

Mr. Ruffley: Will the hon. Lady give way?

Ms Hughes: I shall finish this point first. Under the working families tax credit system, the parents in a two-parent family who do not pay for child care because they choose to have one parent staying at home to provide that care will benefit, as the member of that couple who goes out to work and earns an income will be eligible for the adult credit and the child credits, but not for the child care credits. However, that will not be a penalty, as that couple will not be paying for child care.
In contrast, when both parents in a two-parent family work—and they usually do so for low incomes—they will get an additional credit to help with any child care for which they pay. However, that additional credit is worth only 70 per cent. of the cost of the care, so the argument that the scheme penalises one-parent working families is based on a false premise and is an incorrect analysis of the information that we have received so far.

Mr. Ruffley: I am grateful to the hon. Lady for letting me intervene in her interesting speech. She argues that the effect will be neutral, but the empirical evidence from America about systems such as the working families tax credit system does not support her. The American research shows that, when a two-parent family cannot take advantage of a child care allowance, the incentive is for them to break up to take advantage of the child care provisions for single parents. I should be interested to hear the hon. Ladys analysis of that evidence. If that is what happens in America, why should it not happen here?

Ms Hughes: I am not familiar with that research and so am not able to comment on its validity. Even if it is valid, I am not sure whether the conclusion can be transported to this country. However, I should be astonished if the hon. Gentleman were to contend that couples would break up their families and subject their

children to the consequent trauma simply to get the relatively small amount of child care tax credit to which they may then become entitled. I find that extremely difficult to believe, but I shall certainly look at the research if the hon. Gentleman is willing to send it to me.

Miss Kirkbride: I am grateful to the hon. Lady, as this is an important matter. She compared a two-parent family in which both parents work, and which is thus eligible for child care credits, with one in which only one parent works. Although neither family will be very well off, the family in which only one parent works will have a lower income than the one in which both parents work and which is thereby eligible for child care tax credits. Given the Governments commitment to the two-parent family structure, how can that be fair?

Ms Hughes: As I explained earlier, the conclusion drawn by the hon. Lady depends on the way in which individual families incomes pan out. When both parents in a two-parent family work, they are able to claim the child care tax credit because, by definition, they have to pay for child care. However, they will be reimbursed for those costs only up to a maximum of 70 per cent., and the second earners wages will pay at least 30 per cent. of the total child care cost over and above the tax credit. So the extent to which such a couple might be better off than a family in which only one parent works, but which consequently does not pay for child care, is debatable. It would depend on the levels of income in the two families.
I was outlining the principles needed for a system to deal with the difficult problems I have mentioned. The final principle is to maintain an option of giving assistance directly to the woman.
Working families tax credit is the only system that fulfils all the criteria that I have laid out. We have heard arguments in support of family credit as the best way of delivering additional assistance to poor families, but family credit does not in fact deliver on many fronts. It does not guarantee a minimum income, it does not link measure with reward for work, it is not particularly child centred, and it carries, for lots of families, the stigma of many welfare benefits. On the criteria that are important in measuring effective delivery of help, working families tax credit delivers in a way that family credit does not, and tinkering with family credit would not make it deliver on those criteria.
We have heard much from Conservative Members about how working families tax credit will be an inefficient disaster—a complicated and bureaucratic system. [Interruption.] I am paraphrasing the views that I have heard, not giving my own. We ought to stick to our principles. The system will be complex; any system that delivers to hundreds of thousands of people will be complex. The change from the Department of Social Security to the Inland Revenue will also be complex.
However, the points made by Conservative Members are nothing more than speculation designed to fuel fear. It would be refreshing if Conservative Members would genuinely identify issues that they thought the Government should take into account, while still, because of the importance of the Bill, suggesting some constructive ways around problems. Instead, with the dead hand of opposition, they have retreated into saying, No, we dont want it, and we wont support it.

Mr. Paterson: I am grateful to the hon. Lady, who has been generous in giving way throughout her speech.


Does she believe that the life of an accountant or a personnel director in a little business will be made easier or more difficult by the Bill?

Ms Hughes: Clearly, the Bill asks business to undertake an additional job, but its impact on business has been grossly overstated, particularly by the hon. Member for Vale of York (Miss McIntosh). In practice, the Bill involves a small addition to what businesses do routinely.
In my discussions with Ministers, I have been impressed by the seriousness with which they take the development of the Bill and its implementation. They understand that no matter how good the principles of the Bill are, its effectiveness will be at least partly determined by the practicalities of its delivery. I am sure that my hon. Friend the Financial Secretary to the Treasury will refer to implementation when she sums up the debate.
I have also been impressed by the way in which Ministers have attempted to bring business on board. My hon. Friend the Paymaster General referred to the code of practice being developed with business, which is a genuine attempt to deal in the most helpful and constructive way with the issues that we recognise will arise for small businesses. I must tell Conservative Members that I do not think it unreasonable as a general principle to expect business to be a partner with Government in trying to assist families in work, particularly those on low incomes. Business already acts in that way, as has been said, with income tax and other deliveries through the wage packet.

Mr. Bercow: The hon. Lady sought to address my point, but has not entirely done so. She used the term gross overstatement about the prospective burden on business. Is she aware that the principal complainants on this score, in the first instance and all along over the past 12 months or so, have been the representative business organisations: the Federation of Small Businesses, the Confederation of British Industry and the Institute of Directors? It is very serious to accuse them of gross overstatement. I feel sure that she would not want to be guilty of any such offence.

Ms Hughes: As the hon. Gentleman knows, my reference to overstatement applied to the speech of the hon. Member for Vale of York. I am aware of the representations that have been made—certainly when the working families tax credit was first being considered—by the organisations that the hon. Gentleman identifies. I am also aware that those organisations have since been in dialogue with Ministers. That process will continue. I have every confidence that those organisations and their members will take this measure on board, because Ministers are committed to ensuring that it as successful and effective as possible for the families whom we are trying to help. That, of course, involves accommodating, as far as possible, the concerns of business. I have no doubt that my hon. Friend the Financial Secretary will want to refer to that.
Reference has been made to the view that, under the proposed system, not only would fraud be easier to perpetrate, but policing would be more difficult. My reading of the proposal is entirely at odds with that conclusion. Clause 8 sets out clearly the arrangements for

dealing with fraud and the penalties incurred. That clearly demonstrates that, compared with the arrangements for family credit and many social security benefits, the tax regime will be more stringent. The scope of financial penalties will be extended, the burden of proof required before certain penalties are imposed will be lowered and, unlike other for social security benefits, it will be possible to impose a penalty, for example, for failing to provide information in relation to an application. Hon. Members who feel that the measure is more open to fraud and more difficult to police have misread and misunderstood the proposals.
I share concern about fraud. We must reduce it as far as we can in any system because money should go to the people for whom it is intended. Although I share such valid and serious concerns, I do not share the view that the system is inherently more open to fraud than the present system. As I have argued, it is less open to fraud and will be much more effectively policed when fraud is suspected.
I shall not go through all my points because others want to speak. This measure, taken together with the national minimum wage, the national child care strategy and child benefit increases for all families with children, will give more assistance to low-income families with children than has ever been provided as a package by any Government.
Conservative Members have made it clear not only that they would never have introduced such measures, but that they will resist them. I think that we have established that they will repeal the system if they ever get the chance. I am not quite sure about that, although the electorate will want to be clear. Unfortunately, the fact that the Tories have no interest in assisting those for whom the measure is designed will not be any surprise either to such people or to others. I hope that as many hon. Members as possible will support the measure because it is a radical and genuine attempt to deal with the serious issue of child poverty. For that reason alone, it should be supported.

Miss Julie Kirkbride: For my sins, I sit on the Social Security Select Committee. As my colleague, the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), said, we have looked into the issue of the working families tax credit three times, with a view to issuing three reports.

Mr. Tony McNulty: The hon. Lady was never there.

Miss Kirkbride: How would the hon. Gentleman know, when he is not a member of the Select Committee? If he wants to make such ignorant comments, perhaps he would like to go outside the Chamber and do so. However, he probably would be interested to know that, when the Select Committee discussed the subject of tax credits with witnesses, experts from both left and right roundly said—much to the chagrin of many Labour Members—what a very bad idea it was to introduce those tax credits. The matter has caused some concern among my Labour colleagues on the Select Committee, because it has been very difficult to find anyone who believes that it is a good idea.

Ms Buck: I take it that the hon. Lady was not in the Chamber when I spoke, because I read out the very warm


welcomes that were given to the working families tax credit by organisations such as the National Association of Citizens Advice Bureaux and the Child Poverty Action Group, which are the organisations with the most knowledge and experience of dealing with issues of low pay and poverty.

Miss Kirkbride: All I can say is that, as far as I can recall, when I was sitting in the Select Committee—and I have attended all the sittings at which evidence was given—none of those groups said that the tax credit was a good idea. In fact, on the left of the debate there has been huge concern about purse-versus-wallet issues—a concern which I believe that the hon. Lady rather sympathised with, as I think was mentioned in earlier debates. Of course, coming from the right, there was massive concern among various business organisations as to the impact of the tax credits on the way businesses operate. It was difficult to gainsay any of the points that those business organisations raised, and I feel that, so far in this debate, they have not been gainsaid by Labour Members.
I pay sincere and heartfelt tribute to the hon. Member for Northavon (Mr. Webb), whose critique, revealing what is so terribly wrong with the working families tax credit, was exceptionally accurate and very good. All the running on these issues has been made on the difficulties that have been presented by the introduction of the working families tax credit. However strong our desire to help poor families, we should be aware that this is not the way to do so. Tonight Conservative Members have explained—giving many reasons—why that is the case. We sincerely hope that the Government listen before it is too late.
How did the Government get themselves into this position? Curiously, when they came to power they said that they would cut social security bills. The measure before us is not a cut in the social security bill; it is an increase of £1.5 billion, and rapidly rising.

Mr. Vernon Coaker: Will the hon. Lady give way?

Miss Kirkbride: Let me finish the point. The Government said that they would cut social security bills; if we use their flawed methods of accounting—if they are good enough for the health service, they are good enough for the social security budget—over the next three years they intend to increase the social security budget by nigh on £40 billion. On that point, I would love to give way to the hon. Gentleman.

Mr. Coaker: If we reduce tax allowances for poorer people, would that be increased welfare spending? In a sense, a tax credit is like a tax allowance. [Interruption.]

Miss Kirkbride: I am grateful to my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) for pointing out the answer to that question. That would be a tax cut. In my view, it would be much better to increase the value of tax allowances. That would help many more people in the ways that Labour Members have said is their intention by introducing the working families tax credit. That would be a much better, much simpler way to proceed. It would avoid all the difficulties

presented by the working families tax credit. I would be keen for my party to increase the value of tax allowances when we return to government.

Ms Keeble: Can the hon. Lady explain how a change in the tax allowance would help people who are just going into work, and how it would deal with a child care tax credit, as the working families tax credit will?

Miss Kirkbride: I hope the hon. Lady will forgive me for saying that the answer to her question is obvious. She does not need me to answer it. If people going out to work on extremely low wages are not paying tax, that is a considerable benefit to them. Under the system that the Government are reinforcing, people on low wages pay tax, but reclaim it in what used to be called a benefit, and is now called a tax credit.
We all want to help low-paid families. It is in the interest of society, children, families and individuals that more people go out to work to earn their own living. We should encourage that, but the measure is not the way forward.
The Paymaster General is not at her Bench. Like other hon. Members, I listened to her interview this morning. [Interruption.] I would not have been so uncharitable in my remarks, had I not been prompted by my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley). The Paymaster General said—100 times over, it seemed to me in my semi-dormant state—that she wanted to make work pay. Of course, family credit does that.
I criticise the interviewer, Mr. James Naughtie, who does not always point out facts that are glaringly obvious to those on the Conservative Benches. He never pointed out to the Paymaster General that the Government seek to make work pay by introducing the working families tax credit, when the existing system of family credit does precisely that.
That is the difficulty that the Government face. Family credit is designed to top up low wages. We have already heard how it works, that there is a high take-up relative to other benefits, and that there is assumed to be little fraud in the system, although there is some. Labour Members have not made the case for abolishing that and introducing a new system. It is the Governments prerogative to make the system more generous—

Ms Beverley Hughes: Does the hon. Lady believe that family credit creates sufficient links between work and benefit for it to provide an incentive to work and satisfy some of the objectives that she listed?

Miss Kirkbride: Labour Members have not explained why more people will want to go out to work if they are claiming a tax credit, rather than a benefit. There is no real evidence to suggest that that is the case. The Institute for Fiscal Studies states that a very small number of people might be enticed back to work as a result—40,000, as against 1.3 million whom the Government expect to claim working families tax credit. It will serve as an incentive to only 40,000 extra people, who will want to go out to work because it will be called a tax credit, rather than a benefit.

Ms Hughes: I do not know whether the hon. Lady has any experience of claiming benefit, but perhaps she can


imagine it. If she had a choice between completing a tax return and sending it to the Inland Revenue to claim her tax allowances, or claiming them from another agency and receiving them as a cheque, which would she prefer? [Interruption.]

Miss Kirkbride: As my hon. Friend the Member for Bognor Regis and Littlehampton points out, claimants will still be dealing with the Benefits Agency. They will not fill in a tax return, like those who are not eligible to claim the credit. The Benefits Agency will need to check their circumstances to prevent fraudulent claims.
If the hon. Lady suggests otherwise, there will be massive fraud because the benefit will not be properly policed. Those on the Treasury Benches have insisted that the same entry system, the same gateposts and the same guard against fraud will be introduced in the new system as are to be found in the current system. I do not accept that the two are substantially different.
Although many families who claim family credit may be poorer than other families, they are perfectly capable of working out for themselves whether they will be better off. Where the money comes from does not matter to them; they want to know whether they will ultimately be better off, and whether they are certain to be paid. Earlier exchanges have made it clear that they will have no such certainty, because the money will be handed to employers, some of whom may be unscrupulous.

Mr. Bercow: As the family credit system is clearly working so well, does my hon. Friend not agree that the Government would have been well advised to follow the dictum of Lord Falkland, who said, That which it is not necessary to change, it is necessary not to change?

Miss Kirkbride: Your eloquence bears testimony to the strength of the point that you have raised. Undoubtedly, no case for change has been made—and we are contemplating an enormous change. Labour Members underestimate the flak that will fly when small employers realise what you are asking them to do. You are all living in cloud cuckoo land. When I talk to employers—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. Some difficulties are creeping in on both sides of the House. Hon. Members must bear in mind that they are addressing the Chair, and that they should refer to other hon. Members in the third person

Miss Kirkbride: I sincerely apologise, Mr. Deputy Speaker. I am afraid that I was a little carried away by the exchanges—perhaps because I am giving way too often, and feeling that I am having a conversation rather than addressing the Chair.
Labour Members have not made a case for the proposed change. It was suggested earlier that the increase in take-up would amount to some 400,000, but that is because the benefit is being made more generous. The number of new claimants will be very limited. I do not believe that the new system will make a difference: as long as the money comes from some source, the fact of its being a tax credit rather than a benefit is unlikely to change attitudes to any great extent.
The point raised by Labour Members about the stigma is very dubious. I began to make this point earlier, but as I was intervening on another speech I could not develop it as much as I would have liked. Under the present system, people dealing with the Benefits Agency can apply for family credit anonymously. No one—not the next-door neighbour, or the employer—need know that they are claiming a benefit. Surely the present system imposes the least possible stigma.

Mr. John Randall: As my hon. Friend may know, I have some experience as an employer in a small business. Many valid objections to working families tax credit have been advanced, but one factor that concerns many small and medium-sized businesses is the lack of privacy—the fact that employers will be forced to look into their employees private affairs. What effect does my hon. Friend expect that aspect to have on employer-employee relationships?

Miss Kirkbride: My hon. Friend will know the answer better than I, but I think that Conservative Members consider that human nature is such that, if an employer has to know that one of his employees is claiming a credit such as this, the employee concerned will consider it a much greater stigma.

Ms Buck: The hon. Lady is painting a romantic picture of family credit, as hon. Members have done throughout the debate. Does not the Benefits Agency regularly, and on an enormous scale, contact employers to seek verification of employment details, especially in the small-business, low-income sector? The idea that most employers are in the dark about their employees claims is nonsense.

Miss Kirkbride: The difficulty with the hon. Ladys point is that to whatever extent that is true at the moment—we know not—it will be true of every employee and employer in the country as a result of the changes that the Government are introducing. There is no way around that, so I caution the Government about stigma and about the idea that the working families tax credit is better than the original system. That could blow up in their face, because people on lower wages will be deeply embarrassed that their employers—and, inevitably, their work colleagues—have to know the circumstances of their employment.
The House will forgive me for raising a point that has already been discussed, but I have to correct some of my hon. Friends. It has been suggested that we are increasing welfare dependency—I would agree that we are—by pushing up the income scale the level at which people will be eligible for the working families tax credit. It has been suggested that people might earn £37,000 a year and still be eligible for the working families tax credit, but I draw attention to remarks made by the Paymaster General, who said that
the highest possible level of family income which will be supplemented by the WFTC depends on the number, and age, of the children in the family. For example, if the family had five children under 11 rather than two, it would still receive some WFTC with family income of … £38,000.—[Official Report, 21 July 1998; Vol. 316, c. 502.]
The level is even higher than some of my hon. Friends suggested. In my view, it is wrong that we are encouraging a welfare system that extends so far up the income scale.
I find it particularly surprising that the new Labour Government should want to proceed in such a way, when we share the aim of focusing whatever money we have to spend on disadvantaged groups. How can we suggest that a family earning £38,000 a year—well above the level at which it would pay the top rate of tax—is in any way disadvantaged and should be eligible for a tax credit designed for poorer families?
We should go further. A lot has been said about the unfairness to two-parent families where one parent is left at home to look after the children while the other goes out to work. I do not accept that Labour Members really appreciate how angry many people up and down the country will be when they focus on what Parliament is doing.
We all know that, at this stage, we are the only ones discussing the measure. The majority of people outside have not focused on it and will not know what we have done until the day arrives when it is law and they have to accept the consequences. Two-parent families that want mum to stay at home and dad to go out to work will realise that they are getting no help from the Government, even though they earn less than the family next door which is eligible for more help from the Government, whether through benefits or tax credits.
The fact that a family in a certain segment of society can be helped because of the lifestyle it has chosen—whereas a similar family earning less will receive less help from the Government—will cause deep distress and deep anger. It will rebound in the Governments face when people realise that the legislation will have such an impact.

Ms Keeble: That is a ridiculous argument. If women stay at home to look after their children, they do so because that is their preferred choice. I know that, because I have children. Women certainly do not expect to be paid to stay at home to look after their children. Most women, including many in my constituency, work part time because they have to—they need the money—and the real problem is the fact that they cannot afford the child care that they need. To put this issue up as the politics of envy is complete nonsense. The whole argument is about supporting families, supporting children and giving women choice.

Miss Kirkbride: The hon. Ladys intervention demonstrates the case of Conservative Members, who are trying to point out to the Government that the Bill will be a source of great anger and concern to families who have chosen to stay at home because it does not help them. It is encapsulated in her intervention that she does not understand how aggrieved those people will feel that they should not be eligible for help, while other families, who will have a right to choose how they want to run their lives, will be eligible for Government help. Again, it is one of the unfortunate aspects of the way in which the Government are going forward.
I turn to the biggest difficulty with the Governments proposals. Again, we will see what behavioural effects there will be, but I suspect that they will be deeply shocking to the Government. It is perhaps why we have not seen detailed clauses on the child care tax credit arrangements. The Treasury is worried about what an open-ended commitment those tax credits might be.
The Institute for Fiscal Studies has suggested that, far from the Governments modest estimate being correct—I think that it is a few hundred million; I cannot quite remember—the cost could end up being closer to £4 billion. It is obvious how that might happen.
The Governments proposal could mean that two young women living next door to each other, both with families and both not working, could end up looking after each others children, rather than their own, becoming employed, and becoming eligible for the minimum wage and family credit that the Government propose. An extraordinary volume of public spending could go into such arrangements, whereas now women look after their own children, or their mothers look after them. At the moment, the taxpayer does not pay for that, but under the Government proposals the bill will be picked up by the taxpayer.

Ms Buck: Will the hon. Lady give way?

Miss Kirkbride: I am being told that I should move on a little more quickly, so the hon. Lady will forgive me if I do not give way. I am sure that we can further discuss the difficulties of the Governments proposals in the Select Committee on Social Security.
The difficulties in relation to the business element have been ably explained by all my colleagues. I agree with the Confederation of British Industry that the Government should consider removing small firms from the arrangements. If that cannot happen, perhaps the Minister will consider giving compensation to small firms for administering the new arrangements. I urge the Government to consider the matter. On that point, I end my remarks.

Mr. Barry Gardiner: Two minutes is scarcely enough time to do justice to the Bill.
I think that we would all agree that one of the most humbling things about being a Member of Parliament is when people come to us in our surgeries. Two months ago, a young woman came to my surgery. As she walked through the door, I distinctly recall thinking, What can possibly be her problem? She looked self-assured and confident, yet, within 30 seconds of sitting down, she had burst into tears.
That young woman explained that she had two children, she had been a nurse and now had no prospect of getting back into employment. Quite simply, the costs of the travel that she would have to undertake to get to the jobs that she had looked at were so prohibitive that going back to work would make her worse off, and there was no way in which she could get child care for her children and still make work pay.
Critically, the Bill will change that young womans situation and that of 1 million other families throughout the country, so that work becomes not simply a possibility for those people, but something that they will embrace; it is, after all, what they want to do. Women with children do not necessarily stay at home because they do not want to work. Some of them would be poorer if they went to work because of the cost of child care. I congratulate the Government on introducing such an imaginative scheme to redress that.
The Opposition amendment suggests that the Bill will increase benefit dependency, but it will encourage people out of benefit and into work. It is essential that the remuneration for that work and should be delivered in the pay packet, together with the benefit.

Mr. Nick Gibb: We have had a revealing debate on a deeply flawed, ill-thought-through and partially completed Bill, legislating for a deeply flawed, ill-thought-through and partially completed policy. A pattern seems to be emerging in which the Government take a highly successful policy from the previous Government and tinker with it. They add a bit of new Labour and a bit of egalitarianism and, hey presto, the policy is in a complete mess. They replaced personal equity plans and tax-exempt special savings accounts, which were very popular savings schemes, with the inadequate and flawed individual savings accounts or ISAs. Now they propose to abolish family credit, an in-work benefit that has helped and encouraged hundreds of thousands of people on low incomes to remain in work.
Little stigma is attached to claiming family credit, and 767,000 families receive it. That amounts to a 72 per cent. take-up rate by case load and an 84 per cent. take-up rate by expenditure. An in-work benefit with minimal stigma which can be claimed without ones neighbours, employer or work colleagues knowing is being replaced by one which, in respect of a working lone parent, will require the employer, the finance director and the payroll clerk to know that he or she is claiming a benefit.
Just under half of all employees in Britain work for firms employing fewer than 50 people and 99 per cent. of all businesses employ fewer than 50 people. The Federation of Small Businesses stated in evidence to the Select Committee that, as a result of working families tax credit,
there could be the added stigma of being an employee who receives, and knowingly receives, benefit within the workplace.
Ministers have very little experience of life in the real world of business, but those are real concerns. The hon. Member for Coventry, North-East (Mr. Ainsworth), the Government Whip, laughs but, through their naivety and ignorance, the Government have devised a system that will increase stigma and not reduce it. If the Minister is so convinced that the working families tax credit will not increase stigma, will she tell the House what her target, expectation or hope is for its take-up rate? Will it be lower than the take-up rate for family credit, which is 84 per cent., or will it be higher? I hope that she will address those points in her reply. If she expects it to be higher, what percentage does she expect it to achieve?
The issue goes to the heart of the debate because the take-up rate of benefits is evidence of whether people feel a stigma in claiming it. Family credit, with an 84 per cent. take-up rate, is evidence of very little stigma. The risk of embarrassment by colleagues discovering that one is claiming working families tax credit could well reduce take-up.

Yvette Cooper: The hon. Gentleman clearly prefers family credit to working families tax credit. Does that

mean that he prefers families to be, on average, £17 a week worse off? Alternatively, does he want to spend £1.5 billion making family credit more generous? Which is it?

Mr. Gibb: The hon. Lady churns out the same old soundbites. The £1.5 billion will be wasted by spending the money right up the income scale. By the time that we get back into government, the Labour party will have spent that £1.5 billion—and many multiples of it.

Mrs. Roche: If the hon. Gentleman's party were fortunate enough to win the next general election, would he abolish that extra £17 a week?

Mr. Gibb: The £1.5 billion that the Government keep talking about will have been spent. This is a bad Bill—it will not work. It will leave the incoming Government with a complete mess, and it will be up to the incoming Conservative Government to clean it up—as we will have to clean up every other mess that the Government will leave.
I should like the Minister to give a clear figure of what she expects the take-up rate for the working families tax credit to be. Many lone parents who are struggling to hold down a job and bring up a family could be put in a deeply embarrassing position at work because of the Bill and the Government. That is why the Bill is deeply flawed.
The right hon. Member for Birkenhead (Mr. Field), in a thoughtful speech—as one would expect from him—raised concerns about the increased power that the Bill gives to the employers of the low paid. He talked about the difficulties that may arise if the employee loses his or her job. Despite the best intentions, the reality will be that there will be delays in the Inland Revenue re-routing payments, whereas, under the existing family credit system, there are no such problems because payments are made direct to the household.
The right hon. Gentleman referred to the real likelihood of fraud in the system. He cited the United States and the earned income tax credit, where 15 per cent. of payments are lost to fraud. He is right to say that it is absurd to design into a system the likelihood of fraud, instead of trying to design it out.
In an excellent speech, the hon. Member for Northavon (Mr. Webb) said that all the reforms to tapers and the quantity of benefits could have been made to the existing family credit system. The only distinctive part of the working families tax credit is that it is paid through the tax system and the payroll, and that is where the problems of stigma and vulnerability will arise. He was right to point out the real administrative problems that will arise following changed circumstances, and the intrusive nature of having to discuss changed circumstances—such as the wife leaving the household—with an employer. None of those problems arises under the existing family credit system.
The hon. Member for Rochdale (Lorna Fitzsimons) said that the working families tax credit targets money to women in cases of difficult relationships. How can she know what will happen when there is a dispute over who should receive the working families- tax credit? We have tried to extract the information from the Minister, but we have received nothing. Perhaps the hon. Lady has heard something that we have not.
My hon. Friend the Member for Arundel and South Downs (Mr. Flight), a member of the Select Committee, pointed out that the measure will be a disaster in practice. Individuals will have to go to the Revenue to sort out problems, and companies will have to apply to the Revenue for advances when they pay out more in tax credits than they retain in PAYE or national insurance. That is cumbersome and bureaucratic.
My hon. Friend also pointed out the likely administrative chaos that will arise, in view of the complexity of the working families tax credit and the tight time scale. He raised the problem of the higher marginal withdrawal rates that will affect several hundred thousand people—always a direct consequence when one tries to extend tapering rates.
The hon. Member for Gravesham (Mr. Pond) committed himself, in a way that no Minister yet has—I hope the Financial Secretary will change that—to saying that the take-up rate for working families tax credit will be higher than that for family credit. We will watch this space. If the hon. Gentleman becomes a Minister, I believe that he will come to regret that statement.
The Chairman of the Select Committee, the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), raised his Committees concerns about the use of negative resolution statutory instruments, and emphasised the importance of the Government having targets against which the success of the scheme can be measured.
The hon. Member for Pontefract and Castleford (Yvette Cooper) spent more time talking about the Conservative party than supporting the Bill. She churned out the soundbites but failed to address real concerns about the working families tax credit, dismissing them as merely technical.

Yvette Cooper: The biggest concern for members of the family to whom I referred is whether they will have to pay an extra £35 a week in tax if the Conservative party is elected at the next general election. Taking into account the fact that the £1.5 billion is spent every year, not as a one-off, would the hon. Gentleman make that family pay that extra £35?

Mr. Gibb: The average family is already paying more than £500 a year extra in taxes after 18 months of the Labour Government.
In a powerful speech, my hon. Friend the Member for Canterbury (Mr. Brazier) spoke of the intrusive nature of the working families tax credit and the fact that, as my hon. Friend the Member for Beckenham (Mrs. Lait) also said, the child care element penalises mothers who look after their own children. He said that the Government had played to all the weaknesses in the family credit system rather than to its strengths.
The hon. Member for Northampton, North (Ms Keeble) said that the Governments aim was not to encourage people to use professional child minders but simply to give women a choice. She should accept that the structuring of the new benefit will create a real incentive to use child minders and for auntie to register as a child minder.
My hon. Friend the Member for Vale of York (Miss McIntosh) spoke of the real difficulties that business will face.
The hon. Member for Stretford and Urmston (Ms Hughes) does not seem to understand that the detail of how the credit works matters and cannot simply be left until the Bill is in Committee; it matters to the companies which have to administer it and to the individuals who have to apply for it.
My hon. Friend the Member for Bromsgrove (Miss Kirkbride) said that many groups on the left had nothing positive to say about the working families tax credit in their evidence to the Select Committee. Interventions in her speech by Labour Members highlighted the fact that they simply do not understand the difference between tax and spending. That is quite extraordinary.
When Martin Taylor, who was then chief executive of Barclays bank, was appointed by the Chancellor to examine the tax and benefit system, there were high hopes and great expectations, but reality soon began to bite. He said that a working families tax credit would reduce stigma but, in his evidence to the Select Committee, he said:
As far as the stigma goes, the hard and fast evidence in all these non-financial and psychological matters is hard to come by … The principal psychological assertion, and I agree with you it is an assertion; it is not proven.
The entire principle behind the Bill is based on no evidence. The assertion, as Martin Taylor put it, could well be true for large employers such as Barclays, but it is not true for 99 per cent. of businesses that employ fewer than 50 people.

Miss Kirkbride: I was in the Select Committee when Martin Taylor gave his evidence. It was significant that he suggested that the tax credit would be paid through the coding and it was only when we subsequently took evidence from Treasury officials that it became clear that that was completely impossible, as many anomalies would arise. Mr. Taylors assumptions were completely thrown out by the Treasury mandarins.

Mr. Gibb: Indeed. I will come to that in just a moment.
The CBI said that single parents may well want to retain the option of payment through the Inland Revenue because they want to maintain confidentiality or avoid perceptions of stigma associated with payments of benefit.
The payment mechanism was to be the great step forward, and a system was to be created that would deliver not only the working families tax credit but a whole range of benefits through the tax system. Martin Taylor and the Government envisaged that payments could be made simply by altering the PAYE tax code for each employee, but, unfortunately, the Inland Revenue soon discovered that it was not possible to do that. It devised an N code and ran a series of model examples, but every one of them created a distortion after a few payment periods. When the Government discovered that, why did they not abandon the whole project and simply amend the anomalies that they saw in the family credit system?
The practical reality that working families tax credit cannot be delivered through the PAYE code has two consequences. First, it will mean a huge administrative


burden on businesses, which have to administer the payment of the WFTC separately, and in addition to, PAYE. The CBI has said:
Implementation of the WFTC will entail additional costs for all employers … the obligations on employers will increase considerably.
The explanatory notes on the Bill state that a regulatory impact assessment will be published in time for the Standing Committee. As my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) said at the beginning of the debate, it is a pity that that study is not available now, as it directly impacts on the viability of the Bill.
The second practical reality is that, because the benefit cannot be paid through the PAYE code, the whole notion that stigma will be removed has been lost. The credit will not be part of the tax system, but will be separately identified on the pay slip. Frankly, the Government are in a mess on the issue and they expect small businesses to pick up the costs of their mess.
The Bill itself has gaping holes where the meat of the legislation should be. It gives no details of how the working families tax credit will operate—for example, whether lone parents can opt to have the benefit paid directly to them at home rather than through the payroll. All that is to be decided in secondary, and therefore unamendable, legislation, which we are promised will be published in draft form by the Committee stage.
Why is that detail not in the Bill? We know the policy. It is set out in the Inland Revenue document, which has already been published. It is not true to say that how the tax credit will work is simply an administrative matter. Those issues are at the very root of the policy. Clause 12 concerns forms and documents to be used, so it concerns administration. The truth of the matter is that such clauses have been left out of the Bill because they are controversial and the Government want them to be debated out of sight and in a form in which they cannot be amended. With a majority of 179, what are the Government worried about?
The biggest gap in the Bill is the lack of any reference to child care tax credit. The phrase simply does not appear anywhere. There is not even a clause giving the Government the power to issue regulations. Clause 16—the definitions clause—does not define child care tax credit. The definition of tax credit does not mention them, simply stating that
tax credit means working families tax credit or disabled persons tax credit.
The Inland Revenue document that I have here does mention child care tax credit, stating how much it is worth, how it will be administered and who is entitled to it, but there is no mention of them in the Bill. However, according to the Institute for Fiscal Studies, child care tax credit will cost up to £4 billion a year if everyone who is entitled to it takes them up.
According to the House of Commons Library, the Government intend to issue regulations under section 128 of the Social Security Contributions and Benefits Act 1992—I am sure that my hon. Friends will be interested to hear that. That is very clever but, yet again, it is designed to keep the most controversial part of the legislation out of the debate and out of scrutiny. A £4 billion expenditure plan, to which the Government

have committed themselves, will receive no parliamentary scrutiny. I believe that that is what is called new Labour.
The working families tax credit and the child care tax credit were key components of the Chancellors Budget speech last March, but there was no sign of them in the Finance Bill that followed. Now we have the Tax Credits Bill—the flagship Bill of this Government—but it has been introduced in the House by a junior Treasury Minister. As my hon. Friend the Member for Beckenham said, there is no sign of the Chancellor or of the Chief Secretary. The key element of the working families tax credit—child care tax credit—does not even appear in the Bill.
The Bill introduces a new benefit system, but it is a system that will increase dependency by extending state benefits to 400,000 more families, including many on more than £30,000 a year, when the Government say that they want to reduce dependency. The system will result in £1.5 billion more social security spending, according to the Governments figures—according to the Institute for Fiscal Studies, it will result in £5.5 billion more—when the Government said that they wanted to reduce social security spending.
According to the right hon. Member for Birkenhead, the system is fraught with great dangers and offers bonuses for dishonesty. The CBI says that it will impose huge extra burdens on business. Instead of reducing stigma, it will increase it massively by involving employers in the confidential matter of claiming state benefits. The Bill is yet another piece of vandalism and political dogma, introducing an inadequate, ill-thought-through measure. For many thousands of lone parents who work for small companies, it will be disastrous.

The Financial Secretary to the Treasury (Mrs. Barbara Roche): Let me start on a note of agreement with the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb): this has, indeed, been a lively, interesting debate with some good contributions. However, the hon. Gentleman's speech was the most arrant nonsense that I have heard in all my life. He completely refused to answer the basic question that will be asked by the constituents of every Conservative Member in the run-up to the next general election: will they abolish the £l7 a week that is going to working families?

Mr. Paterson: Will the Minister give way?

Mrs. Roche: Let me make some progress. The hon. Member for Bognor Regis and Littlehampton asked about take-up. We hope that everyone eligible will apply, which will help 1.3 million families. We hope that they will take their right to the tax credit. That compares very favourably with the old system.
Conservative Members painted a rosy picture of the old system: it was completely confidential and there were no problems. That further illustrates their detachment from the real world. In the real world, employers are often phoned up. Claimants collect benefit from post offices and people can see who goes there. This legislation offers something radical by honouring the ability of people to work and allowing working families to take advantage of it.


This legislation is a key element of the Governments strategy to make work pay and help people to move from welfare into work. We want to do something about that because the present system is failing hundreds of thousands of working families. Moving into a job from unemployment often leaves people little better off.

Miss Kirkbride: The Minister said that benefit claimants go to post offices. People who claim child benefit go to the post office, but that is a non-means-tested benefit. People in the post office do not know whether it is child benefit or low-income benefit that is being claimed. There is not the same stigma and it is not the same point.

Mrs. Roche: The hon. Lady and her colleagues made points about confidentiality in the old system that are not borne out.
The Bill will ensure that people can improve their income and circumstances. It will help to eliminate the growing division between working and non-working families. Under the previous Administration, that division became wider and wider. More and more people without work are living in poverty. Unlike the previous Government, we believe that one of the best ways to tackle poverty is by helping people into jobs. We believe that for a historic reason: my party—the party of Government, the Labour party—came into existence around the dignity of work and helping people to get into work, and we very much honour that. Those principles and the principles behind the legislation were well set out by my hon. Friend the Member for Rochdale (Lorna Fitzsimons) and, in a brief but important speech, my hon. Friend the Member for Brent, North (Mr. Gardiner).
The Bill is a radical solution to old problems. What did we have from the Conservative party? We heard from the hon. Member for Brentwood and Ongar (Mr. Pickles) a moving speech about The Archers, which seemed to dominate the theme of the day. I have to say to the hon. Gentleman, for whom I have some liking, that I am very worried because he attacked Eddie Grundy and Brian Aldridge. He may not know that Eddie Grundy has a significant fan club, and that the actor who plays Brian Aldridge is a constituent of mine and lives in my road. The hon. Gentleman had better watch out.
The working families tax credit is not family credit with a new name and a few tweaks around the edge. It is a significant modernisation of the tax and benefits system. The Government believe that it is right to take action to ensure that work pays more than benefits. Through the tax credits, we are delivering just that. People will get to keep more of what they earn and the tax credits will ensure that it pays people to work.
The hon. Member for Northavon (Mr. Webb) made an interesting and well-considered speech. Clearly, he has a different view of how the scheme ought to be structured. There is a fundamental disagreement between the Government and the Liberal Democrats about the nature of benefits and work.
It is right to provide proper help with child care costs so that parents can balance work and family responsibilities. The old system of family credit has failed in its provision for child care. We are determined to ensure that no one is unable to take up work through lack of access to affordable, quality child care, and to help parents better to balance work and family responsibilities.
Let us make no mistake: there is a deep philosophical difference between Conservative Members and the Government. It was well set out by the hon. Members for Arundel and South Downs (Mr. Flight) and for Canterbury (Mr. Brazier), who made clear their view that women should stay at home to look after young children. We want to give women choice. We want to give all families choice about what they do. That is very important.

Mr. Brazier: I am a little surprised by the hon. Ladys claim, given that I made it clear that my wife, who has small children, works for a small business. The Oppositions proposal would offer women the option either to stay at home or to go to work, and either way to enjoy the same tax allowance.

Mrs. Roche: The hon. Gentleman's intervention enables me to make a number of remarks. We have known each other for a number of years, and for more years than I care to mention we were students together. I know that he has an honest and consistent approach, which he showed this evening. He has attacked his own Government in the past and he attacks us now. He said, This Bill is an attack on marriage. It undermines families. The biggest issue that undermines families is poverty, which is what the Bill seeks to address.

Mr. Paterson: The Minister mentions poverty. How many families earning more than £25,000 will benefit from the extra £1.5 billion, which is a crass breach of the Prime Ministers promise not to increase social security spending?

Mrs. Roche: I say to the hon. Gentleman—

Mr. Paterson: How many?

Mrs. Roche: If the hon. Gentleman will do me the courtesy of allowing me to answer his question, I am keen to help him. Hon. Members will know how keen I always am to help them. The answer to the question is that it will depend on the individual circumstances of each family.
The Opposition are fundamentally confused. They have put up a shadow benefits Minister, but the measure is not about benefits. It is about work and tax credits, but they have completely failed to understand that point. The Bill will deliver more help where it is most needed. Every working family will, for the first time, have a guaranteed minimum income of at least £10,000 a year. I shall be interested if, in the run-up to the next election, the Opposition campaign on the basis of abolishing that entitlement.
As a tax credit, rather than a benefit, the WFTC will be entirely different from family credit. The stigma attached to claiming benefit can be harmful to many people, and it contrasts starkly with a tax credit that can be paid directly into a bank account. There is a big psychological difference between receiving a giro and seeing a tax credit on a wage slip. That brings us back to a fundamental Labour principle: that the dignity of work is essential to everybodys self respect.

Mr. Bercow: I hope that the Financial Secretary accepts that the dignity derived from the retention of ones


privacy is also important. In the light of concerns on that score that have been sincerely expressed by the Federation of Small Businesses and others, what specific steps is the hon. Lady taking to address that matter and to remove or minimise the threat to privacy that the new policy poses?

Mrs. Roche: I understand the hon. Gentleman's point, but let me reassure him and the House that there is no threat to confidentiality. The information is given to the Revenue, which then tells the employer the amount of the tax credit. Is the hon. Gentleman seriously saying that there is a problem or some sort of breach of privacy in connection with the Revenue? If so, my hon. Friend the Paymaster General will want to know all about it.

Mr. Gibb: Given that the tax credit is to be separately identified on the payslip, how can the hon. Gentleman claim that there will be no breach of confidentiality when the owner, the finance director and the payroll clerk will know which of the employees of the business is receiving a benefit from the state?

Mrs. Roche: Of course they will not know the individual circumstances of that family. Judges often ask, Is that your best point? I say exactly the same to the hon. Gentleman.
The Bill will lead to a radically different way of life for many people. That was well set out by my hon. Friend the Member for Gravesham (Mr. Pond) and my hon. Friend the Member for Stretford and Urmston (Ms Hughes). A key feature is that couples will have a free choice about payment: whether one or both partners work, if they decide that, in their personal circumstances, it would be best for the partner not in work to receive the tax credit, the Inland Revenue will pay the tax credit directly to that partner. In that respect, I am grateful for the helpful comments made by my hon. Friend the Member for Regents Park and Kensington, North (Ms Buck), who succinctly and successfully pointed out to the hon. Member for Bromsgrove (Miss Kirkbride) the error of her ways.

Mr. Webb: Library estimates were that up to £900 million would be transferred from women to men. If the Financial Secretary believes that to be an overestimate, what figure would she put on the transfer?

Mrs. Roche: I listened carefully to the hon. Gentleman's speech. The calculation that produced that figure is based on an assumption that the Government certainly do not accept.
Several hon. Members rightly raised the problem of fraud. My right hon. Friend the Member for Birkenhead (Mr. Field) went into that matter in a characteristically thoughtful speech. In designing the legislation, we have put in place new measures that will help to keep fraud at as low a level as possible, building on the experience of studies into fraud in the existing system. In addition, the Inland Revenue is developing systems for detecting fraud.
The Bill gives the Inland Revenue the necessary powers to carry out inquiries into cases of suspected fraud which will be backed up with sanctions. We shall tackle fraud in tax credits with the same resolve with which we are tackling fraud in other areas of government activity.
Many Conservative Members spoke about the Bills effects on employers. The Bill takes positive steps for employers. A committed, motivated work force is a great asset to any firm. By ensuring that they get their side of the measures right, employers will go a long way to retain employees and gain their respect for and loyalty to the company. This is win-win legislation for employers and employees.
Many Conservative Members referred to burdens on business. I thank the hon. Member for Vale of York (Miss McIntosh) for her kind comments and I shall miss our rather detailed discussions on structural funds and her helpful contributions, but I take issue with her about burdens on business. My hon. Friend the Paymaster General has done a great deal of work with small firms organisations.

Mr. Ruffley: Will the hon. Lady give way?

Mrs. Roche: No, I want to make progress.
Those organisations made an invaluable contribution to the design of the scheme and provided practical advice on the implementation of payment through the wage packet.
We shall take no lessons from Opposition Members about burdens on business. I remember only too well the previous Governments record. [Interruption.] Conservative Members are shouting because they do not want to hear this. They do not like to be reminded of the facts. What was the previous Governments record? They removed 3,000 regulations on business but introduced 10,000 new ones. [Interruption.] They may keep shouting, but we will keep reminding them—

Mr. Deputy Speaker: Order. I am sorry to interrupt the Minister but hon. Members may not keep on shouting. I must have silence while the Minister replies.

Mrs. Roche: I am sorry that Conservative Members do not want to hear what I have to say, but they will hear much more. They will constantly be reminded.
We have been working to reduce the burden of red tape on business. We have reduced the burden of employees national insurance contributions and we are transferring the Contributions Agency to the Inland Revenue to enable businesses to deal with one organisation for tax and national insurance purposes.
On 9 March 1998, I had the great pleasure of making the closing speech for the Government on the Third Reading of the National Minimum Wage Bill, which will affect the working lives of people in this country. Today, with this Bill, we put into place another vital piece of legislation to help working families. I commend the Bill to the House.

Question put, That the amendment be made:—

The House divided: Ayes 126, Noes 365.

Division No. 48]
[10.13 pm


AYES


Abbott, Ms Diane
Campbell, Mrs Anne (C'bridge)


Adams, Mrs Irene (Paisley N)
Campbell, Ronnie (Blyth V)


Ainger, Nick
Campbell—Savours, Dale


Ainsworth, Robert (Covtry NE)
Canavan, Dennis


Alexander, Douglas
Cann, Jamie


Allen, Graham
Caplin, Ivor


Anderson, Donald (Swansea E)
Casale, Roger


Anderson, Janet (Rossendale)
Caton, Martin


Armstrong, Ms Hilary
Chapman, Ben (Wirral S)


Ashton, Joe
Chaytor, David


Atherton, Ms Candy
Chisholm, Malcolm


Atkins, Charlotte
Clark, Rt Hon Dr David (S Shields)


Austin, John
Clark, Dr Lynda (Edinburgh Pentlands)


Banks, Tony



Barnes, Harry
Clark, Paul (Gillingham)


Barron, Kevin
Clarke, Charles (Norwich S)


Battle, John
Clarke, Eric (Midlothian)


Bayley, Hugh
Clarke, Rt Hon Tom (Coatbridge)


Beard, Nigel
Clarke, Tony (Northampton S)


Beckett, Rt Hon Mrs Margaret
Clelland, David


Begg, Miss Anne
Clwyd, Ann


Bell, Martin (Tatton)
Coaker, Vernon


Benn, Rt Hon Tony
Coffey, Ms Ann


Benton, Joe
Cohen, Harry


Bermingham, Gerald
Coleman, Iain


Berry, Roger
Connarty, Michael


Best, Harold
Cook, Frank (Stockton N)


Blackman, Liz
Cooper, Yvette


Blears, Ms Hazel
Corbett, Robin


Blizzard, Bob
Corbyn, Jeremy


Boateng, Paul
Corston, Ms Jean


Borrow, David
Cousins, Jim


Bradley, Keith (Withington)
Cranston, Ross


Bradley, Peter (The Wrekin)
Crausby, David


Bradshaw, Ben
Cryer, John (Hornchurch)


Brown, Rt Hon Nick (Newcastle E)
Cummings, John


Brown, Russell (Dumfries)
Cunningham, Jim (Covtry S)


Browne, Desmond
Dalyell, Tam


Buck, Ms Karen
Darling, Rt Hon Alistair


Burden, Richard
Darvill, Keith


Burgon, Colin
Davey, Valerie (Bristol W)


Butler, Mrs Christine
Davidson, Ian


Byers, Rt Hon Stephen
Davies, Rt Hon Denzil (Llanelli)


Caborn, Richard
Dean, Mrs Janet


Campbell, Alan (Tynemouth)
Denham, John






Dewar, Rt Hon Donald
Keeble, Ms Sally


Dismore, Andrew
Keen, Alan (Feltham & Heston)


Dobbin, Jim
Keen, Ann (Brentford & Isleworth)


Donohoe, Brian H
Kemp, Fraser


Doran, Frank
Khabra, Piara S


Dowd, Jim
Kilfoyle, Peter


Drew, David
King, Andy (Rugby & Kenilworth)


Drown, Ms Julia
King, Ms Oona (Bethnal Green)


Eagle, Angela (Wallasey)
Kingham, Ms Tess


Eagle, Maria (Lpool Garston)
Kumar, Dr Ashok


Efford, Clive
Ladyman, Dr Stephen


Ellman, Mrs Louise
Lawrence, Ms Jackie


Ennis, Jeff
Laxton, Bob


Field, Rt Hon Frank
Lepper, David


Fisher, Mark
Leslie, Christopher


Fitzpatrick, Jim
Levitt, Tom


Fitzsimons, Lorna
Lewis, Ivan (Bury S)


Flint, Caroline
Lewis, Terry (Worsley)


Follett, Barbara
Linton, Martin


Foster, Rt Hon Derek
Lloyd, Tony (Manchester C)


Foster, Michael Jabez (Hastings)
Lock, David


Foster, Michael J (Worcester)
Love, Andrew


Foulkes, George
McAllion, John


Galbraith, Sam
McAvoy, Thomas


Galloway, George
McCabe, Steve


Gapes, Mike
McCartney, Ian (Makerfield)


Gardiner, Barry
Macdonald, Calum


George, Bruce (Walsall S)
McDonnell, John


Gibson, Dr Ian
McGuire, Mrs Anne


Gilroy, Mrs Linda
McIsaac, Shona


Godman, Dr Norman A
McKenna, Mrs Rosemary


Godsiff, Roger
McNulty, Tony


Goggins, Paul
Mactaggart, Fiona


Gordon, Mrs Eileen
McWalter, Tony


Griffiths, Jane (Reading E)
McWilliam, John


Griffiths, Win (Bridgend)
Mahon, Mrs Alice


Grocott, Bruce
Mallaber, Judy


Grogan, John
Marek, Dr John


Gunnell, John
Marsden, Gordon (Blackpool S)


Hain, Peter
Marshall, David (Shettleston)


Hall, Mike (Weaver Vale)
Marshall, Jim (Leicester S)


Hamilton, Fabian (Leeds NE)
Marshall—Andrews, Robert


Hanson, David
Martlew, Eric


Harman, Rt Hon Ms Harriet
Maxton, John


Heal, Mrs Sylvia
Meale, Alan


Healey, John
Michael, Alun


Henderson, Ivan (Harwich)
Michie, Bill (Shefld Heeley)


Hepburn, Stephen
Miller, Andrew


Hesford, Stephen
Mitchell, Austin


Hewitt, Ms Patricia
Moffatt, Laura


Hill, Keith
Moonte, Dr Lewis


Hinchliffe, David
Moran, Ms Margaret


Hodge, Ms Margaret
Morgan, Ms Julie (Cardiff N)


Home Robertson, John
Morgan, Rhodri (Cardiff W)


Hoon, Geoffrey
Morley, Elliot


Hope, Phil
Morris, Ms Estelle (Bham Yardley)


Hopkins, Kelvin
Mountford, Kali


Howarth, George (Knowsley N)
Mudie, George


Howells, Dr Kim
Mullin, Chris


Hoyle, Lindsay
Murphy, Denis (Wansbeck)


Hughes, Ms Beverley (Stretford)
Murphy, Jim (Eastwood)


Hughes, Kevin (Doncaster N)
Murphy, Paul (Torfaen)


Humble, Mrs Joan
Norris, Dan


Hurst, Alan
OBrien, Bill (Normanton)


Jackson, Ms Glenda (Hampstead)
Olner, Bill


Jackson, Helen (Hillsborough)
Organ, Mrs Diana


Jenkins, Brian
Osborne, Ms Sandra


Johnson, Alan (Hull W & Hessle)
Palmer, Dr Nick


Johnson, Miss Melanie (Welwyn Hatfield)
Pearson, Ian



Pendry, Tom


Jones, Barry (Alyn & Deeside)
Pickthall, Colin


Jones, Helen (Warrington N)
Pike, Peter L


Jones, Jon Owen (Cardiff C)
Plaskitt, James


Jones, Dr Lynne (Selly Oak)
Pond, Chris


Jones, Martyn (Clwyd S)
Pope, Greg


Kaufman, Rt Hon Gerald
Pound, Stephen





Prentice, Gordon (Pendle)
Stinchcombe, Paul


Prescott, Rt Hon John
Stoate, Dr Howard


Primarolo, Dawn
Stott, Roger


Purchase, Ken
Strang, Rt Hon Dr Gavin


Quin, Ms Joyce
Stringer, Graham


Quinn, Lawrie
Stuart, Ms Gisela


Rammell, Bill
Sutcliffe, Gerry


Rapson, Syd
Taylor, Rt Hon Mrs Ann (Dewsbury)


Raynsford, Nick



Reed, Andrew (Loughborough)
Taylor, Ms Dari (Stockton S)


Robertson, Rt Hon George (Hamilton S)
Temple-Morris, Peter



Thomas, Gareth (Clwyd W)


Robinson, Geoffrey (Covtry NW)
Timms, Stephen


Roche, Mrs Barbara
Tipping, Paddy


Rogers, Allan
Todd, Mark


Rooney, Terry
Touhig, Don


Ross, Ernie (Dundee W)
Trickett, Jon


Rowlands, Ted
Turner, Dennis (Wolverhton SE)


Ruane, Chris
Turner, Dr Desmond (Kemptown)


Ruddock, Ms Joan
Turner, Dr George (NW Norfolk)


Russell, Ms Christine (Chester)
Twigg, Derek (Halton)


Ryan, Ms Joan
Twigg, Stephen (Enfield)


Salter, Martin
Vaz, Keith


Sawford, Phil
Ward, Ms Claire


Sedgemore, Brian
Wareing, Robert N


Shipley, Ms Debra
Watts, David


Simpson, Alan (Nottingham S)
Whitehead, Dr Alan


Singh, Marsha
Wicks, Malcolm


Skinner, Dennis
Williams, Rt Hon Alan (Swansea W)


Smith, Rt Hon Andrew (Oxford E)
Wills, Michael


Smith, Angela (Basildon)
Winnick, David


Smith, Jacqui (Redditch)
Winterton, Ms Rosie (Doncaster C)


Smith, John (Glamorgan)
Wise, Audrey


Smith, Llew (Blaenau Gwent)
Wood, Mike


Snape, Peter
Woolas, Phil


Soley, Clive
Worthington, Tony


Southworth, Ms Helen
Wright, Anthony D (Gt Yarmouth)


Spellar, John
Wright, Dr Tony (Cannock)


Squire, Ms Rachel
Wyatt, Derek


Starkey, Dr Phyllis



Stevenson, George
Tellers for the Ayes:


Stewart, David (Inverness E)
Mr. Clive Betts and


Stewart, Ian (Eccles)
Jane Kennedy.




NOES


Ainsworth, Peter (E Surrey)
Cran, James


Allan, Richard
Curry, Rt Hon David


Amess, David
Davey, Edward (Kingston)


Ancram, Rt Hon Michael
Davies, Quentin (Grantham)


Arbuthnot, Rt Hon James
Day, Stephen


Atkinson, Peter (Hexham)
Dorrell, Rt Hon Stephen


Ballard, Jackie
Duncan, Alan


Bercow, John
Duncan Smith, Iain


Beresford, Sir Paul
Emery, Rt Hon Sir Peter


Blunt, Crispin
Evans, Nigel


Boswell, Tim
Faber, David


Bottomley, Peter (Worthing W)
Fabricant, Michael


Brady, Graham
Fearn, Ronnie


Brazier, Julian
Flight, Howard


Breed, Colin
Forth, Rt Hon Eric


Browning, Mrs Angela
Foster, Don (Bath)


Bruce, Ian (S Dorset)
Fowler, Rt Hon Sir Norman


Bruce, Malcolm (Gordon)
Fox, Dr Liam


Burns, Simon
Fraser, Christopher


Burstow, Paul
Gale, Roger


Butterfill, John
Garnier, Edward


Campbell, Menzies (NE Fife)
George, Andrew (St Ives)


Cash, William
Gibb, Nick


Chidgey, David
Gorman, Mrs Teresa


Chope, Christopher
Gorrie, Donald


Clappison, James
Gray, James


Clark, Rt Hon Alan (Kensington)
Greenway, John


Clifton—Brown, Geoffrey
Gummer, Rt Hon John


Collins, Tim
Hague, Rt Hon William


Cormack, Sir Patrick
Hamilton, Rt Hon Sir Archie






Hammond, Philip
May, Mrs Theresa


Harris, Dr Evan
Michie, Mrs Ray (Argyll & Bute)


Harvey, Nick
Morgan, Alasdair (Galloway)


Hawkins, Nick
Moss, Malcolm


Hayes, John
Nicholls, Patrick


Heald, Oliver
Norman, Archie


Heath, David (Somerton & Frome)
Oaten, Mark


Heathcoat—Amory, Rt Hon David
Öpik, Lembit


Hogg, Rt Hon Douglas
Ottaway, Richard


Howarth, Gerald (Aldershot)
Page, Richard


Hughes, Simon (Southwark N)
Paice, James


Hunter, Andrew
Paterson, Owen


Jack, Rt Hon Michael
Pickles, Eric


Jackson, Robert (Wantage)
Prior, David


Jenkin, Bernard
Randall, John


Jones, Nigel (Cheltenham)
Redwood, Rt Hon John


Keetch, Paul
Rendel, David


Kennedy, Charles (Ross Skye)
Robathan, Andrew


Key, Robert
Roe, Mrs Marion (Broxbourne)


King, Rt Hon Tom (Bridgwater)
Rowe, Andrew (Faversham)


Kirkbride, Miss Julie
Ruffley, David


Kirkwood, Archy
Russell, Bob (Colchester)


Lait, Mrs Jacqui
St Aubyn, Nick


Lansley, Andrew
Salmond, Alex


Leigh, Edward
Sanders, Adrian


Letwin, Oliver
Sayeed, Jonathan


Lewis, Dr Julian (New Forest E)
Shepherd, Richard


Lidington, David
Simpson, Keith (Mid-Norfolk)


Livsey, Richard
Smith, Sir Robert (W Abdns)


Lloyd, Rt Hon Sir Peter (Fareham)
Soames, Nicholas


Luff, Peter
Spelman, Mrs Caroline


McIntosh, Miss Anne
Spicer, Sir Michael


MacKay, Rt Hon Andrew
Spring, Richard


Maclennan, Rt Hon Robert
Stanley, Rt Hon Sir John


McLoughlin, Patrick
Steen, Anthony


Major, Rt Hon John
Streeter, Gary


Malins, Humfrey
Stunell, Andrew


Maples, John
Swayne, Desmond


Mates, Michael
Swinney, John


Mawhinney, Rt Hon Sir Brian
Syms, Robert





Tapsell, Sir Peter
Welsh, Andrew


Taylor, John M (Solihull)
Whittingdale, John


Taylor, Sir Teddy
Wilkinson, John


Tredinnick, David
Willis, Phil


Trend, Michael
Wirrterton, Mrs Ann (Congleton)


Tyler, Paul
Winterton, Nicholas (Macclesfield)


Tyrie, Andrew
Woodward, Shaun


Viggers, Peter
Young, Rt Hon Sir George


Walter, Robert



Wardle, Charles
Tellers for the Noes:


Webb, Steve
Mr. Nigel Waterson and


Wells, Bowen
Sir David Madel.

Question accordingly negatived.

Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on Second or Third Reading):—

The House divided: Ayes 320, Noes160.

Question accordingly agreed to.

Bill read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).

TAX CREDITS BILL [MONEY]

Queens recommendation having been signified—

Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a),
That, for the purposes of any Act resulting from the Tax Credits Bill, it is expedient to authorise—

(a) the payment out of money provided by Parliament of any expenses incurred by the Commissioners of Inland Revenue in consequence of that Act;
(b) any increase attributable to that Act in the sums payable out of money so provided under any other Act; and
(c) the payment into the Consolidated Fund of any increase attributable to that Act in the sums payable into that Fund under any other Act.—[Mrs. McGuire.]

Question agreed to.

PETITION

Dangerous Drivers

Mr. Bob Laxton: May I present to the House a petition of 2,304 names from Mrs. Susan Clewer, who lives in my constituency? The petition was drawn up after the tragic death of her 25-year-old son.
Andrew Clewer was crushed to death between the front of a double-decker public service bus and the rear of a stationary vehicle that he was unloading in Nottingham city centre just over a year ago.
The petitioners therefore request that the House of Commons urge the Secretary of State for the Home Department to pass legislation with the effect that drivers who seriously injure or kill someone, and who are convicted of driving without due care and attention, shall be disqualified for a period of at least five years, and shall have to resit their driving test before their licence is reinstated; drivers convicted of causing death by dangerous driving shall be disqualified for a period of not less than 10 years, and shall have to resit their driving test before their licence is reinstated; and drivers convicted of driving with an excess of alcohol in their bloodstreams shall be disqualified for a period of not less than 15 years, and shall have to resit their driving test before their licence is reinstated. A second such offence should lead to permanent disqualification.
The petitioners remain, etc.

To lie upon the Table.

A34

Motion made, and Question proposed, That this House do now adjourn.—[Mrs. McGuire.]

Dr. Evan Harris: The very fact that I have secured the debate shows that persistence pays off. I have applied religiously for Adjournment debates week in, week out, and I will not allow tonights sparse attendance to prevent me from making my points as strongly as I can on behalf of constituents who will be affected by the problems created by, and caused around, the A34 where it passes through my constituency. In fact, the strength of feeling in my constituency is in inverse proportion to attendance here tonight—but I am delighted to see that the transport Minister is present, and I look forward to hearing her response.
I want to take the Minister for a journey along the A34, visiting some of our local black spots. That is a sad thing to have to say about an otherwise beautiful constituency. On our journey, I shall endeavour to paint a holistic picture of the problems surrounding the road, and ask the Ministers Department and the Highways Agency to adopt an equally holistic, and co-ordinated, approach to some of the problems—for problems there most certainly are.
During my relatively short time as a Member of Parliament, I have met a previous Transport Minister in the present Government to discuss the matter. I have also met Highways Agency officials on the site, and have received, and read carefully, many petitions and papers on the subject. I am sure that the Ministers pile of correspondence and documents on the subject is as daunting as mine.
If the Minister and I were indeed to drive down the A34, the first section down which we would drive would be the stretch between the M40 at Wendlebury and the Peartree intersection, which is the turning to north Oxford. Such is the noise of the road that if we were trying to talk, we would have to turn up the radio, or at least speak up. Obviously, the problem is not great for people in cars, but it is huge for people living nearby whose lives are blighted by the noise on that section of the road. They cannot use their gardens, because there is constant noise from a busy road down which cars and lorries travel, including heavy goods vehicles. The road has become increasingly busy since the opening of the M40 and the Newbury bypass, and since—apparently—the amount of goods transported by road has increased.
It is obvious, and cannot be disputed, that the noise is not solely due to the volume of traffic—which, although the extent of some developments was not clear when the road was built, might have been anticipated. Much of the noise is plainly caused by the surface on the section concerned. Not for nothing is the road known as the noisiest in Britain. It is a concrete road whose surface grooves were constructed too deeply: I do not think that there is any doubt about the fact that they were constructed more deeply than they should have been. The only issue now is whether the Government are liable to make reparation.
A major problem has been caused to people living in parts of my constituency—Gosford, Water Eaton parish, parts of Kidlington and parts of north Oxford. Other areas are also affected, such as Islip in the constituency of Banbury, and villages on the western side of the A34.
In 1983, the then Department of Transport calculated the expected noise from this section of the road—an increase of about 3 to 8 decibels by 2004. In 1990—a year after the road was opened—the Department recognised that, by 2004, the noise increase would be greater than that expectation, and in 1992 it confirmed that the depth of the grooves were greater than expected. The county council produced data from the Transport Research Laboratory, a respected independent body, showing that noise levels were significantly higher. The area was recognised, at the time of the building of the road, to be noise sensitive, because of the earth mounds that were created then.
There was little joy from the previous Government about dealing with the problem. Indeed, the letters that we received from Ministers in response to requests for amelioration of the surface ranged from the disappointing to what was considered to be rude. Expectations were raised by the election of the Labour Government. In spring 1997, Kidlington, Oxford and Abingdon Labour News showed the Minister for Employment, Welfare to Work and Equal Opportunities, the right hon. Member for Oxford, East (Mr. Smith)—who was then shadow Secretary of State for Transport and who I have notified of tonights debate—pictured with local Labour candidates and councillors, saying that they were getting together
to try to solve the noise problems of the A34 near Kidlington.
The right hon. Gentleman
took up the issue with the Secretary of State
following representations from the area,
drawing attention to the severity of the problem and seeking clear guidance on the criteria which need to be satisfied to get the case for action considered further.
He added that Labour was
 very concerned at the damage that road noise made to peoples quality of life and an incoming Labour Government would review programming to see if more priority could be given to noise reduction.
A local Labour county councillor, who has long campaigned on this issue—I pay tribute to him for that—welcomed
 the beginning of a solution to this unbearable noise pollution that people have suffered since 1991.
And so say all of us, but it is time for those expectations to be realised by a Government who, we note, have acknowledged that noise pollution can blight peoples lives.
I refer to the interesting—and, in many respects, worthy—paper entitled A New Deal for Trunk Roads in England. Chapter 6.4 talks about:
A budget for noise mitigation on existing roads.
The document, which was published in July 1998, states:
There are a number of cases where local residents are particularly concerned about noise from existing roads and where re-surfacing cannot be justified on normal maintenance grounds.
I digress to say that one of the benefits of the concrete section is that it is long lived; therefore the misery of my constituents, and of residents of neighbouring areas, will also be long lived, unless there is some amelioration of the road surface on grounds other than normal maintenance. The road is not scheduled for resurfacing maintenance for many years to come.
The document continues:
In these cases, alternative measures such as noise barriers might be appropriate.
We wait to hear whether that would be considered here as a temporary measure. The document goes on:
Up to now the policy has been only to consider cases on roads built before 1969 and to apply extremely rigorous criteria with the result that very few cases have qualified for relief. These criteria were tightened by the previous Government. We propose—
that is the Labour Government—
to establish revised criteria and a ring-fenced annual budget. These should enable the Highways Agency over a reasonable period of time to deal with some of the most serious and pressing cases. We shall make a separate announcement about this in due course.
As far as that goes, I welcome those sentiments. There is recognition, as there is in other documents, that noise pollution is as serious an environmental problem for the people affected by it as pollution by exhaust fumes or other, more recognised—in a sense, popular—forms of pollution. We still await that further announcement, and I say directly to the Minister that we are looking at this road as a test of whether the Government are able to provide sufficient money and sufficiently appropriate criteria to allow the case of this road to be considered among the bids that I imagine will be made. The Minister will know that the case of the road has gone to the parliamentary ombudsman. I understand that she will not be able to comment on the detail of the case, but the fact that the ombudsman has had the case for two years and that it has not been dismissed in that time suggests that there must at least be a reasonable case as to whether there is already a necessity for government of whatever sort—the Highways Agency or Department of the Environment, Transport and the Regions—to make good the damage that was done.
I continue the journey down the A34. We enter the section between Peartree and Botley, which passes relatively close to the beautiful hamlet of Wytham in my constituency. That does not have the concrete surface, but is still a cause of noise pollution, albeit on a lower scale than the more northern area.
I am pleased to say that the section now has a quiet thin-layer surface. We are grateful that that has been done, but it has been at a certain cost to Oxford. I want to take the opportunity of the debate to ask the Minister whether she can take action to deal with the disruption to the lives of people in Oxford caused by avoidable actions of the Highways Agency in managing the resurfacing of parts of the road.
Consultation at the end of last year about the work on that section of the road was poor. A meeting was held in Wytham village hall in August. I was not even told about that meeting as the sitting Member of Parliament.
As soon as I heard about the proposals—it was just before the work had started—I wrote a letter pleading for a quiet, thin-layer surface to be used. I am delighted that I received a letter back saying that a thin surface would be used, albeit the letter came on the last day that roadworks were taking place, so it was informing me of historical fact.
A decision was made by the Highways Agency not to use a contraflow and completely to close the northbound section. It was also decided not to do night working, but to have day and night working. Chaos resulted, with the complete diversion of northbound traffic through neighbouring areas, particularly along Botley road, which


needs no further excuses for transport chaos. It is difficult to calculate the damage that was caused to peoples life styles, to the ambience in that part of Oxford, and to the businesses along Botley road.
I have received representations from businesses along Botley road about how their passing trade suffered by the logjam that was created. I know that the right hon. Member for Oxford, East was concerned about the extra traffic along the eastern bypass, which jammed that up completely.
Can the Minister reassure us that, in future, if roadworks are done on that busy road, separate steps might be taken to allow traffic still to flow north-south, to avoid diverting traffic through Oxford, or, as the Automobile Association has suggested, to signal much earlier that alternative major routes could be used and that people should not go anywhere near Oxford? It is alleged that the signing of potential diversions was not clear enough and that people missed the eastern bypass as a possible route and then tried to head through Oxford town centre.
We then come on our journey to the Botley section of the A34. I declare an interest in that I live in that area. I was keen in making my complaints not to prioritise that part of the A34 simply because I live there; it might have been seen as the reason for raising the matter. That is why looking at the whole road holistically is the appropriate way to go forward.
In that section of the road, the houses are closer to the A34 than any other section of the highway. Therefore, there are problems with the thundering vibrations of heavy goods vehicles using that road, with noise and fumes and with vehicles travelling at speed, which raises safety concerns. There have been instances of vehicles ending up in peoples gardens along Westminster way because of gaps in safety barriers—such gaps may or may not be inevitable—and because of bends on that road.
Just before the last general election, a temporary 50 mph speed limit was put in both as a safety measure—in fact, it was headlined as a safety measure because that is the only basis on which the police will support speed restrictions that they do not have the resources to enforce—and to reduce the noise problems. The problem with the temporary speed limit, which was welcome although politically timed, was that it was inadequately enforced. The police said that they would have had difficulties enforcing it even if they were minded to do so because of what appeared to be the dubious legality of the consultation process. We are still awaiting enforcement.
The temporary speed limit was made permanent last September. Despite the lack of enforcement, there has been a reduction in speed, and therefore noise pollution, along that section of the road. Enforcement would produce further improvement. We are delighted that the Government are considering allowing the revenue raised from speeding fines to be used by the agencies involved in setting up speed cameras and administrating the fines system.
Oxfordshire county council in partnership with Thames Valley police plans to install more speed cameras. However, that would require a manpower reduction in Thames Valley police—which is not what my constituents want—to provide the funds to build and run the cameras and process the fines, since the police receive none of the revenue. I am delighted that on 9 December, after

representations from many Members and from the Liberal Democrats in particular, the Government agreed that hypothecation was feasible and that either some of the money could be reuperated by those authorities or, as the police would prefer, an administrative charge could be added to the fine to make sure that enforcement was not carried out at a loss.
I am delighted that the northbound stretch of the part of the A34 that was due for maintenance was resurfaced with a noise-reducing thin layer. That, combined with the limited but significant effects of the speed limit, has made a considerable difference to people living on the western side has not yer had a thin-layer surface applied. It was unforunate that both sides could not have been resurfaced at the same time. The benefit of the noise reduction on the northbound side is partially lost by the fact that heavy goods vehicles thunder along a noisy road surface southbound. There are patches of thin layer, but that only serves to make the distinction even more profound.
According to the police and the Highways Agency, there are plans for more signing into the 50-mph zone. We are still waiting for that to happen. I am curious to know why signing changes could not have been made in the northern part of that section at the same time as the Peartree to Botley resurfacing.
There are further problems in that section of the road in respect of some of the junctions. In particular, the northbound slip road on to the A34 from the A420 junction is rather a blind corner. I believe that it is an accident waiting to happen. I have inspected it with local councillors and campaigners—the Hinkseys A34 action group—who have worked very hard on all the issues that I have mentioned. The Highways Agency agrees that it is a dangerous junction and that if the opportunity arose something could be done to improve it.
There are difficulties in egress from Stanley close and slightly less but still significant difficulties in egress from North Hinksey village, North Hinksey lane and Southern bypass. There are also difficulties in egress on to the northbound section of the road from Westminster way and Harcourt hill. There are many students in the area and there has been a fatality. Investment must be made to prevent accidents.
I wish to end by asking the Minister to agree that a strategy needs to be adopted so that we do not suffer either continued disruption or untackled problems.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Glenda Jackson): I congratulate the hon. Member for Oxford, West and Abingdon (Dr. Harris) on his persistence in securing this debate and in presenting the concerns of his constituents ever since he was returned to this House. He kindly took me on what was virtually a three-part journey down the A34, and he displayed in some detail the roads significant impact on his constituents who live so close to it, and on the neighbouring community of North Hinksey.
The hon. Gentleman rightly highlighted the fact that the considerations being undertaken by the ombudsman on the difficulties experienced on the first part of our journey down the A34 are not ones upon which I may comment. I would like to thank him for highlighting the work undertaken by the now Minister for Employment,


Welfare to Work and Equal Opportunities, my right hon. Friend the Member for Oxford, East (Mr. Smith), before the general election on noise pollution. That campaign has produced a policy on the part of the Labour Government. I will touch on that issue in more detail later.
I would like to take the House not down the A34, but back in time. The A34 originally formed the Winchester to Preston trunk road and, with the A33 to the south of Winchester, formed a strategic link between the port of Southampton, the midlands and the north-west. It was not, however, purpose built, being predominately a single carriageway, passing through the centres of many towns and cities along its route, including Oxford.
The current route of the A34 through Botley was built in the early 1960s as part of an extensive programme of improvements, primarily to take long-distance through traffic out of Oxford city centre. However, it also forms part of the city's ring road, aiding local traffic movement around Oxford. It follows the western edge of the valley cut by the River Thames and its tributaries, and there is no obvious alternative route.
At the time it was built, there were few, if any, concerns regarding the long-term consequences of traffic growth. We now know that the old predict-and-provide method of road planning was flawed, as it took little or no account of the fact that improving the road network itself generates traffic growth. By then, the M40 had been built, as had the Peartree hill to Wendlebury section of the A34; with one notable exception, this completed the upgrade of the A34 into a high-speed dual carriageway route—a fact borne out by the subsequent unexpectedly high levels of traffic growth along the A34, resulting in a large number of lorries driving through Botley and North Hinksey. I know that some of the hon. Gentleman's constituents fear that the recent opening of the Newbury bypass to the south will have a similar impact.
In effect, what we have heard from the hon. Gentleman is a microcosm of a problem that can be replicated across the whole of the UK as a direct result of the failure of previous Administrations to tackle the issue of how we create a properly integrated transport system and how we make the best use of our existing infrastructure. There was a failure to move away from expecting our roads to be the main movers of people and goods. That is why the Government have introduced an integrated transport strategy.
In this instance, the hon. Gentleman is concerned with what can be done to improve conditions for his constituents. Much of the problem has resulted from the way in which our transport system was allowed to grow in such an ad hoc and unregulated way. This is something that we are determined to address.
I would like to take this opportunity to remind the House of one or two aspects which are relevant to the situation which was so graphically detailed by the hon. Gentleman. The situation on the relevant part of the A34 has resulted from the high levels of traffic growth experienced in recent years, as the A34 provides a vital link between the Hampshire ports and our industrial heartland, giving access to the single European market and our other trading partners.
It is the Governments aim to move more of our goods by rail. Central to that aim will be the establishment of a strategic rail authority, which will have the remit of

bringing coherence to the railway system, ensuring that it meets the needs of the passengers and freight customers whom it serves, and encouraging the shift towards the use of rail freight, but much freight will still need to travel by road. We aim to publish proposals to improve the efficiency of our lorry fleet and, on a local level, to encourage co-operation between the freight operators and local authorities on lorry routing and delivery hours.
Our transport White Paper and the associated paper, A New Deal for Trunk Roads in England, also contain proposals to deal with the more immediate problems associated with living close to a busy road.
On the second part of our journey down the A34, the hon. Gentleman highlighted the difficulties caused by recent road works on the A34 north of Botley. It is my understanding that, under health and safety legislation, the Highways Agency is required to provide a safe working environment and to ensure the safety of the travelling public. With older dual carriageways such as the A34, it is not possible to achieve that without closing one carriageway fully.
I assure the hon. Gentleman that the agency does not close one carriageway of a busy road without an in-depth consideration of the consequences and consultation with the police. The hon. Gentleman said that the work could have been done more quickly, and the debate in the Oxford newspapers centred, I understand, around the time taken to reconstruct the Seacourt stream bridge, but it overlooked the fact that the contract length was determined by the need to rebuild large sections of the carriageway. I will certainly raise with the Highways Agency the issue of the failure to consult adequately or in sufficient time.
I understand that, at the hon. Gentleman's request, Michael Ford, the Highways Agency's area manager for the A34, visited last May the area that constituted the third part of our journey, and discussed these issues with the parish council and other interested parties. Following that meeting, the Highways Agency commissioned its managing agents, P. B. Kennedy and Donkin Ltd., to carry out two studies to investigate what improvements could be made.
The first study will consider safety-related issues, such as the improvements to the north-facing slip roads at the Botley interchange and safer access to the various minor roads that join the A34 in the area. The second will concentrate on environmental aspects, such as the replacement of the chain-link fence between Westminster way and the A34. Depending on those studies, which are expected to be completed later this year, the agency will consider a package of improvement measures.
Noise is perhaps the most frequent cause of complaint from people living alongside trunk roads. We have announced that we will tackle the problem on several fronts. Much work has been done in recent years on developing road surfaces, and the newest quieter surfaces can reduce noise by the same amount as halving the traffic flow. We have instructed the Highways Agency to specify that noise-reducing surfacing will be considered when carrying out resurfacing works in noise-sensitive areas.
Indeed, as the hon. Gentleman said, that work has already been done on the northbound carriageway of


the A34 through Botley, and I know that his constituents appreciate the resultant reduction in traffic noise. The southbound carriageway does not at present need resurfacing, but I can assure him that, when it does, the most appropriate noise-reducing surface will be used.
The hon. Gentleman has asked the Department about porous asphalt, although he did not mention it tonight. It is true that using that material would bring a further reduction in traffic noise. However, that material cannot be used when merely resurfacing the road. The nature of the material requires special drainage. It needs to be laid in a relatively thick layer compared with the more recently developed quieter surfaces and that often means that additional works are required. For example, the central reserve safety fencing may need to be raised and there can be problems in maintaining headroom. Those factors dramatically increase costs and the length of time needed

for the work. Using porous asphalt is really only an option with a new road, or where a road is being completely rebuilt.
I touched on the campaigning efforts of my right hon. Friend the Member for Oxford, East, to which the hon. Gentleman paid tribute before the general election. He also drew attention to the fact that the Government have announced that we intend to establish a ring-fenced budget to provide noise mitigation along some of the worst-affected sections of the trunk road network. To implement that policy, it is important that we use selection criteria that are as fair as possible—

The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at four minutes to Eleven o'clock.